Sims Mortgage Funding closed a $15,560,000 FHA-insured loan in 120 days to facilitate new construction of multifamily rental housing as part of a master planned community in Shreveport, Louisiana.
RiverScape is a 208-unit rental property targeted to working families. The initial phase of an 83-acre master-planned, mixed-use, mixed income community, Riverscape will contain 11 two- and three-story buildings plus a clubhouse, pool and deck area, a mail and pool house building, and a maintenance/car wash structure.
When completed over multiple phases, the community will feature multi-family rental units, multi-family ownership units, and single-family ownership units in walkable neighborhoods with parks and green space. Market rate housing, workforce housing and affordable housing will be offered.
One of the unique aspects of this project is its ownership structure. One of the principals is a local investment fund, organized as a “Double Bottom Line Fund”, which seeks to deliver both market rate returns to the investors (first bottom line) and positive economic, social, and environmental impacts to the low and moderate income (LMI) communities in which the Fund invests (the second bottom line).
The developer and the Fund were looking to complement its investment in the project with a source of non-recourse debt that offered attractive terms and conditions: an FHA-insured financing met those requirements. They also were looking for a lender that was familiar with both FHA programs and the local market; SMF had financed approximately 10 multifamily and healthcare projects in the Shreveport area.
- The FHA-insured loan insured under the Section 221(d)(4) program, was processed by the Little Rock HUD Office under the Multifamily Accelerated Processing (MAP) protocol.
- Sims obtained FHA’s Firm Commitment approval of the deal in 88 days and closed the loan 41 days later.
- Because the loan was funded with taxable GNMA mortgage-backed securities, there was no negative arbitrage during the construction period.
By processing the FHA mortgage insurance on a timely basis, the developer was able to access the market under very favorable interest rate conditions. This rate enhanced the overall feasibility of the project and will enable the developer to maintain rents at a competitive level.
The RiverScape transaction is the 14th FHA-insured loan SMF has closed for this client, a major regional commercial and multifamily real estate company.
To learn more about these and other transactions, contact Kerrie J. Tomasiewicz at 201-307-9383 or Ktomasiewicz@simsmortgage.com.