Miami—JLL has secured $13.9 million in FHA Section 223(f) financing under HUD’s Tax Credit Pilot Program for the acquisition and rehabilitation of a Miami area apartment community on behalf of Phoenix Apartments Venture LP. The 164-unit community, Phoenix Apartments, is located in the Miami suburb of Homestead.
The HUD program “is intended to be used for projects like this that are receiving new tax credits and being renovated. The project had an experienced development team and is in a strong market. That combination makes for a very financeable deal and both HUD and JLL were happy to participate,”JLL Managing Director C.W. Early, who led the team on the transaction, told MHN.
The 35-year, fully amortizing loan will ensure the preservation of the property’s affordability requirements and allow the company to perform a substantial rehabilitation of the community.
“Miami is a very high-cost market and preserving and improving affordable housing in the area is of the utmost importance. The restricted rents at the property are 20 to 45 percent below the current market rents that could be achieved,” Early explained. “That differential means that by preserving the housing and improving its quality with the rehab of approximately $35,000 per unit, more residents can afford high quality housing. Affordable communities in the South Miami-Dade/Homestead market have an average occupancy of 98 percent, which shows that there is an undersupply that needs to be met with more quality affordable housing.”
The 11-building community was originally built in 1995, and offers amenities like a swimming pool, clubhouse, playground and outdoor courtyard.
Unit improvements will include new Energy Star-rated kitchen appliances, new cabinetry, plumbing and light fixtures. Exterior upgrades will be made to the roofing, gutter installation and landscaping.
The loan offers a 79 percent loan-to-value ratio, 3.35 percent interest rate and a mortgage insurance premium of 0.25 percent. The loan also received 4 percent LIHTC along with Multifamily Mortgage Revenue Bonds.