Bellwether Secures $43M for MI Affordable Housing

Ten manufactured housing communities in Michigan totaling 1,715 units have received financing from a $42.6 million structured loan closed by Bellwether Enterprise Real Estate Capital LLC, increasing the state’s affordable housing stock.

Bellwether Enterprise, the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc., executed the loan for the Affordable Communities Fund III Credit Facility as part of the Fannie Mae Credit Facility Program.

“The Affordable Communities Fund III Credit Facility is an exciting addition to Bellwether Enterprise’s manufactured housing community portfolio,” Ned Huffman, president of Bellwether Enterprise, said in prepared remarks. “Bellwether Enterprise has an unparalleled ability to successfully execute deals at an institutional level with a boutique-style approach, and this deal is a shining example of that.”

Ned Huffman

The deal includes seven stabilized and three value-add properties, all part of a growing pod for the owner-operator. The borrower, a longtime client, was looking for the most flexibility, leverage and speed to grow a fixed-rate product, said MJ Vukovich, vice president of Bellwether Enterprises in the Minneapolis office, who arranged the structured loan. The loan features a 4.9 percent interest rate for a 12-year fixed term with four years interest only, followed by a 30-year amortization period.

“A rare deal negotiated with Fannie Mae and the borrower, this was a special one for Bellwether Enterprises. We were proud to help create new, high-quality manufactured home communities for families across the state, and to leverage our expertise in providing flexible financing solutions to bring this loan to fruition,” Vukovich said in prepared remarks.

A recent report by Marcus & Millichap notes the need for affordable housing and an aging population is generating strong demand across the United States for manufactured home communities. The Manufactured Housing Research Second Half 2018 national report also stated investors’ appetite for manufactured home communities remains strong.

“Capital-flush investors from other asset classes are seeking to capitalize on higher yields in manufactured home communities,” the report noted. “However, the supply of available listings remains well below demand throughout most areas of the nation, making it more difficult to find quality parks.”

Bellwether Enterprise deals

Bellwether Enterprise has made several transactions in the last few months in other parts of the multifamily housing sector. In late September, the firm announced it had secured $21.5 million in loans for the owner of a 370-unit portfolio of five multifamily affordable housing properties in the San Francisco Bay area. Each of the properties received a Freddie Mac Targeted Affordable Housing Preservation Loan with a 15-year financing term at a fixed rate. The loans have interest-only payments for the first three years.

A few weeks earlier, Bellwether Enterprise and Maverick Capital originated a $25.2 million loan through Freddie Mac to allow HLC Equity to purchase Republic Deer Creek Apartments in south Fort Worth, Texas. The 336-unit, Class A multifamily community was built in 2012 and is located south of Fort Worth’s CBD and near both Interstate 35 and a nearby office and commercial district along Everman Parkway.

Images courtesy of Bellwether Enterprise