Accelerated financing has been arranged for Lewisburg Summit Apartments, a three-story, 130-unit affordable community in Lewisburg, Tenn. The property, designed for elderly and disabled renters, is in Marshall County, one of Tennessee’s designated Opportunity Zone census tracts. It is supported by an allocation of 4 percent Low-Income Housing Tax Credits. The Tennessee Housing Development Agency is a partner.
READ ALSO: Look Before You Leap Into Opportunity Zones
Working with developer LHP Capital to make sure the financing terms were consistent with Opportunity Zone guidance, Walker & Dunlop structured the $11.6 million.
A Blessing and a Challenge
“The biggest challenge was the time urgency,” Rob Rotach, Walker & Dunlop senior vice president and lead on the transaction, told Multi-Housing News.
“The developer secured (its) tax–exempt bond reservation, which required us to close by the end of September. Otherwise, the developer was at risk of losing (its) bond allocation, which would have derailed the transaction entirely. HUD unveiling (its) new Section 221(d)(4) pilot program, designed to prioritize and expedite these types of LIHTC affordable projects, was both a blessing and a challenge.”
The blessing, he added, was that HUD’s directive all the way from the leadership at HUD headquarters called for affordable projects to receive designated underwriting and processing efficiencies to ensure the deal would close on time. The timing presented a challenge in the sense that this was one of the first pilot programs in the system.
“As such, we were somewhat of a test case to determine how the process would work most effectively,” Rotach continued. “Our relationship with the great team in the HUD Atlanta office allowed for an effective communication throughout the process, as we were learning together how best to navigate some of the processing improvements that were implemented.”
Last month, Walker & Dunlop secured financing for an acquisition in North Carolina.
Built in 1973 at 730 Franklin Ave., the apartment community is situated near schools, colleges and shopping. The Henry Horton State Park—a 1,200-acre recreation area built on Chapel Hill, Tenn. property once owned by a former Tennessee governor—is a 19-minute drive away.
Lewisburg Summit Apartments is 100 percent supported by Section 8 Project-based rental assistance. The property will undergo $8.5 million in renovations to include unit kitchen, bathroom and common area upgrades. These improvements, as well as HVAC systems and electrical system upgrades, will significantly boost the building’s energy efficiency. Accessibility by individuals with disabilities will also be enhanced.