CBRE HMF Inc. is the first lender in the nation to finance two projects through the new Department of Housing and Urban Development's Low Income Housing Tax Credit pilot program.
CBRE closed a $13.2 million mortgage for Villa Vasona Apartments in Los Gatos, Calif., and $4.2 million mortgage for Twin Oaks Apartments in Vacaville, Calif.
The nonrecourse and fully amortizing loans have low fixed interest rates and 35-year terms. The California Tax Credit Allocation Committee qualified both properties for 9% LIHTCs implementing its “higher rehabilitation limits and increased efficiency available under the pilot program,” CBRE said.
Acting as a direct HUD FHA lender, the San Francisco-based lender has initiated a program designed “to increase FHA’s production of affordable housing” by streamlining the mortgage process from application to approval time.
Properties will receive moderate improvements as well as general site upgrades.
Highland Cos. LLC and Mission Housing Development Corp. are the financing sponsors, while the RBC Capital Markets’ Tax Credit Equity Group provided the LIHTC equity capital.
The loans were processed and closed in just 120 days after the initial concept meeting, “breaking new ground in affordable multifamily financing,” for low-income people, said Jayne Hulbert, president of CBRE HMF.
Both properties were constructed in 1983. Villa Vasona Apartments is a seven-building, 107-unit property restricted to elderly and disabled tenants that was built on a site leased from the Town of Los Gatos at a cost of $1 per year so it remains in its present use.
Twin Oaks Apartments consists of 12 two-story walk-up structures and totals 46 one-, two- and three-bedroom family units.