DEAL OF THE DAY: Section 8 Affordable Housing Sells for $41.2M
- May 13, 2008
By Anuradha Kher, Online News EditorSan Diego–Steadfast Villa Nueva LP purchased the 390-unit Villa Nueva Section 8 affordable housing apartment complex in San Diego from Villa Nueva for $41.2 million.When owners of the property received an unsolicited purchase offer, Kevin Mulhern of CB Richard Ellis’ San Diego Multi-Housing Group and Jim Lampman of CBRE’s HUD Services/Affordable Housing Group in Seattle took the sales assignment to market the property on behalf of the non-profit owner, Villa Nueva.The primary challenge in completing the transaction was overcoming U.S. Department of Housing and Urban Development’s policy restrictions impacting non-profit ownership rights. Faced with many affordable properties opting out of the affordable housing program, HUD had recently reinterpreted its mortgage prepayment policy, such that non-profit owners are not allowed to extract equity from a sale.To overcome this obstacle, the CBRE team conducted a limited offering to qualified buyers. The team worked closely with the buyer to appeal the new contradictory policy and obtain congressional clarification of existing housing legislation. Notably, Rep. Bob Filner, D-San Diego, discussed approval of the Villa Nueva transaction in the U.S. House of Representatives in a bi-partisan appeal to reverse HUD’s new interpretation of its prepayment and equity release policy.