Commercial real estate finance company Walker & Dunlop, through the Department of Housing and Urban Development's Lean 232 program, closed the first Rental Assistance Demonstration program loan for a health care facility.
The roughly $3.4 million loan is being used to provide funds for Arbor Ridge Assisted Living, which is under the auspices of the Vancouver (Wash.) Housing Authority in partnership with Columbia Nonprofit Housing. The deal was the first time the RAD program, which recapitalizes public affordable housing, was applied to an affordable assisted living facility.
"We were pleased to assist Vancouver Housing Authority in replacing the financing on this property with a long-term, fixed-rate HUD mortgage," said Walker & Dunlop senior vice president Michael Vaughn, who led the Bethesda, Md.-based finance company's team, in a June 30 news release. "Combining the RAD subsidy with the tenants' affordable rental payments is a ground-breaking approach to using HUD's 232 Seniors Housing program to finance an affordable assisted living facility."
Through the deal, the assisted living facility was refinanced with low-income housing tax credits and tax-exempt bonds. Additionally, the Vancouver Housing Authority had to transfer rental subsidies for 30 units to complete the refinance.
The transaction featured a 35-year term and a 35-year amortization schedule, and a 78.5% loan-to-value and 1.45 debt service coverage ratio for the loan.
Since the beginning of 2014, Walker & Dunlop has originated more than $1 billion through HUD, Fannie Mae and Freddie Mac for affordable, seniors and healthcare loans.
