TODAY'S DEALS: Walker & Dunlop Funds $6.92M HUD Refinance Loan

Jefferson Hills, Pa.—Walker & Dunlop LLC announced it recently provided a $6,920,000 loan under the U.S. Department of Housing and Urban Development’s Section 223(f) program for Payne Hill Apartments, located in Jefferson Hills, Pa.

The refinance loan was structured with a 35-year fully amortizing mortgage. Walker & Dunlop negotiated a competitive all-in rate for the borrower. The loan was underwritten to an 80 percent loan-to-value with a 1.58 Debt-Service Coverage ratio. This transaction reflects the increasing popularity of using the HUD 223(f) program for refinance loans.

The sponsor, Jim Schubiner, The Access Group, comments, “Walker & Dunlop did a good job to process the transaction as quickly as possible. We got a great rate fixed for 35 years.”

Payne Hill Apartments is a 150-unit market-rate apartment complex situated on over 14 acres. The garden-style multifamily property offers one-, two-, and three-bedroom townhouse units in 23 buildings. Amenities include a swimming pool, clubhouse, fitness room, and tennis courts. Payne Hill Apartments was 98 percent leased at closing.

Beech Street closes on $8.9M FHA loan

Hamilton Square, N.J.—Beech Street Capital LLC announced today that it has provided an $8.9 million HUD 223(a)(7) loan to refinance Arcadia Nursing & Rehabilitation Center, a 128-bed skilled nursing facility in Hamilton Square, N.J. The transaction was originated by Joshua Rosen, executive vice president of Beech Street Capital. Working from Beech Street’s Chicago office, Rosen leads the company’s nationwide healthcare efforts.

The borrower had 28 years left on an existing $9.0 million FHA loan. Beech Street accomplished an important goal for the borrower by increasing the loan term to 35 years, something that is becoming increasingly rare with HUD.  By extending the loan term, Beech Street was able to refinance the property with substantial debt service coverage savings to the borrower and further increased savings with a significantly reduced interest rate.  Beech Street also skillfully managed the underwriting process, which allowed for a seamless and expedited closing. “Beech Street was an absolute pleasure to work with,” says Mike Gabriel, principal of Arcadia Retirement Community, Inc.  “A term extension was absolutely essential for us, but we understand that they are not frequently granted. We were thrilled when it came through.”

Beech Street expects to see more refinance activity in the seniors market in the coming year. “The conditions are really favorable right now for anyone with a current HUD-insured mortgage to refinance under Section HUD 223(a)(7),” Rosen says. “Not only are rates at all-time historical lows, but HUD has all but eliminated the (a)(7) queue.”