San Diego—Community HousingWorks (CHW) of San Diego has obtained a $6.23 million Freddie Mac Forward Rate Lock Tax-Exempt Loan (TEL) – the first in the industry for construction-to-permanent financing – for the significant rehabilitation of Mayberry Townhomes. The property is a 70-unit affordable housing development in San Diego.
CHW will acquire Mayberry Townhomes and undertake renovation and new construction utilizing 4 Percent Low Income Housing Tax Credits and construction financing from Bank of America Merrill Lynch, with Greystone and Freddie Mac providing the permanent financing. The Freddie Mac TEL for the transaction, arranged by Greystone, is a 24-month forward rate lock with an 18-year permanent loan term and 35-year amortization with an actual LTV of 82 percent.
Originally developed in 1984, Mayberry Townhomes comprises 18 two-story townhouse buildings that are currently restricted at 50 percent to 80 percent of area median income. Upon completion of the renovations, the property will be restricted to 50 percent and 60 percent AMI levels.
As a result of the Freddie Mac Forward Rate Lock TEL, the property will receive significant improvements estimated at $35,623 per unit. One of the major thrusts of the rehab will be the addition of a community room, which will include a learning center, computer lab, and gathering space for residents. Also, the property will feature solar equipment for energy generation and use.
“The acquisition will lower rents and make more of these desirable townhomes affordable to working families in San Diego,” said Anne B. Wilson, senior vice president of CHW. San Diego is one of the most expensive rental markets in the country, with median rents at $2,340 a month, and residents spending an average of 43.7 percent of their incomes on rent, according to Zillow.