Greystone Able to Restructure Locked-out Loan

Greystone, a New York-based multifamily lender, was able to restructure a 40-year bond deal to provide a $5.2 million Federal Housing Administration-insured loan secured by a Savannah, Ga., property, at a time when the original financing was still in a lockout period.

That restriction would have ordinarily prevented the borrower from refinancing. The original loan was a Ginnie Mae collateralized bond deal done in 2003.

Greystone said it was able to obtain the necessary approvals to structure the new financing around the lock. Jonathan Rosenberg, an FHA originator with expertise in tax-exempt bonds at Greystone, structured the transaction.

The borrower was able to get a new HUD Section 223(a)(7) program loan “at a substantially reduced interest rate.” There is 40-year amortization on the new loan.

Betsy Vartanian, who is the head of Greystone’s FHA business, said to the company’s knowledge, no other lenders have been successful in this type of transaction. Greystone said it was the second one of these it has done.

She added the borrower had no significant out-of-pocket expenses with the new transaction.

“While not widely known, we are seeing significant opportunities in the market for deals of this nature. Although only a small percentage of bonds can be restructured during the lock-out period, all borrowers should explore whether they can take advantage of this unique option,” Vartanian said.