Chicago High-Rise Lands $70M Financing

Morningside North Apartments, an 18-story multifamily community in Chicago, will be able to continue to offer affordable housing for its residents thanks to a $70.4 million Fannie Mae affordable housing loan provided by Greystone.

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The National Foundation for Affordable Housing Solutions, now known as Foundation Housing, of Rockville, Md., acquired the 256-unit building in November 2018 for approximately $90 million from the Northwest Home for the Aged, according to Yardi Matrix data. The November 2018 sale was subject to a $67.5 million loan held by Greystone.

The new $70.4 million permanent financing was issued in May by the Illinois Housing Development Authority (IHDA) as Multifamily Housing Revenue Bonds with Zions Bank as trustee, Yardi Matrix reported. The 17-year loan has an annual interest rate of 3.94 percent and is due June 1, 2036. Greystone also noted it has a15-year yield maintenance. It was financed under the Fannie Mae MBS as Tax-Exempt bond (M.TEB) program with IHDA issuing the tax-exempt, long-term bonds.

Greystone reported Aegon is also providing tax credit equity in the amount of $30.5 million that will be used for building renovations. With newly issued 4 percent tax credits, the transaction also qualifies for 90 percent LTV as well as the Fannie Mae Green Rewards program, as the building’s owner plans to reduce water usage by 30 percent and energy use by more than 15 percent.

Located at 170 West Oak St. in the Gold Coast submarket of Chicago, the building was completed in 1981. It has mostly one-bedroom units and a vacancy rate of less than 2 percent. The building has an on-site office, library, club room, community room, storage, laundry room, controlled access and social activities for its residents.

Under a 20-year Section 8 HAP contract, all units in the building are reserved for very-low income families with 60 percent Area Median Income (AMI) or less. It is also subject to Section 42 (LIHTC) provisions for tax credits applied in 2019 with rent restricted through 2049, according to Yardi Matrix.

Affordable Housing Transactions

In late 2018, Foundation Housing, still operating as the National Foundation for Affordable Housing Solutions (NFAHS), acquired an 86-unit multifamily property in Ontario, Calif., for $26 million. That transaction, one of the top 10 multifamily transactions in the Inland Empire for 2018, was subject to a $27 million CMBS loan provided by Fannie Mae and arranged by Greystone.

Earlier in 2018, the National Foundation for Affordable Housing Solutions in partnership with Standard Communities, purchased Park Shirlington, a 294-unit affordable housing apartment property in Arlington, Va. NFAHS officials said at the time it was important to preserve affordable housing in the Washington, D.C., area, where it was increasingly hard to maintain properties affordable to lower-income residents.