Portsmouth, Va.—Hunt Mortgage Partners LLC, a wholly owned subsidiary of Hunt Mortgage Group, announced it provided $4.7 million in financing from Freddie Mac to facilitate the acquisition and rehabilitation of Dale Homes Phase I, in Portsmouth, Va. The single parcel, containing 146 units, includes 38 one-bedroom, 72 two-bedroom, 28 three-bedroom and eight four-bedroom units.
“Dale Homes will be part of the Rental Assistance Demonstration program in which its public housing units will be converted to project-based Section 8 housing with a 20 year HAP contract-in-place at closing for 100 percent of the units,” said Joshua Reiss, assistant vice president at Hunt Mortgage Group. “The property will remain affordable housing relying upon LIHTC financing and other sources to finance the rehabilitation of the property. By converting through the RAD program, the property receives two 20-year project based rental assistance contracts thereby preserving affordability for the next 40 years.”
The entirety of the development was built in 1940 as a 296-unit public housing community by Portsmouth Redevelopment & Housing Authority. Phase II, the additional 150 units of the project are proposed for future renovations but were not included in the collateral for the Freddie Mac loan. The loan has an 18-year loan term, with two-years interest-only payments and a 35-year amortization schedule beginning in year three. In addition to that loan, Towne Bank of Chesapeake, Va. will provide a $6.3 million bridge loan to be advanced and then re-paid by the receipt of LIHTC equity at construction completion. This loan will bridge the tax credit equity during the construction period.
“Working with Freddie Mac to finance this property enables us to leverage our collective strengths to develop high-quality affordable housing,” added Reiss. “The RAD program is transforming public housing and brings unprecedented benefits to local communities throughout the country. The program enables the use of public and private investments to help revitalize and preserve much needed affordable housing.”
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