BWE, a national commercial and multifamily mortgage banking company, announced that it has secured $19,680,982 in financing to acquire and rehabilitate three affordable housing developments. Hamilton Place plus Madison Cottage of both Rensselaer and Benton County are all located across rural Indiana.
Lundat Kassa, Vice President in BWE’s Washington, DC, office, and Bob Morton, Senior Vice President and Director of RHS Programs in BWE’s LaPorte, Indiana, office, originated the financing on behalf of Vita Investment Holdings LLC, an Indiana-based developer of affordable and seniors housing.
Vita Investment acquired the properties to preserve their long-term affordability for residents. The financing came through two loans, including a construction loan sourced from Fifth Third Bank. BWE also secured a $17,097,570 loan through the USDA 538 Forward Permanent Loan program, which features a 40-year amortization period and a very competitive interest rate and is non-recourse to the borrower. This loan also features no interest rate risk and the ability to refinance or modify the interest rate if rates decline. Vita Investment also utilized 4% Low-Income Housing Tax Credits to finance the project.
“BWE’s ability to problem solve was critical to securing financing for this important rehabilitation project. When an initial construction lender backed out due to constraints in the capital environment, our partnership with Fifth Third Bank enabled us to secure an attractive loan so development could proceed on schedule,” said Kassa. “By tapping into our full suite of capital solutions, we found the right product for Vita Investment, allowing them to continue to execute on their business plan and preserve much-needed affordable housing in rural Indiana.”
The three properties financed are Hamilton Place, a 54-unit property in Arcadia; Madison Cottage of Rensselaer, a 71-unit development in Rensselaer; and Madison Cottage of Benton County, a 51-unit building in Fowler. The developments will be affordable to residents earning up to 60% of the area median income. As part of the rehabilitation, all three properties will receive improvements to mechanical systems and the units’ interiors will be enhanced. The properties’ amenities, which include community rooms, computer centers, playgrounds, basketball courts, exercise rooms, and walking paths, will also receive upgrades.
