Greystone has arranged and provided a portion of $88.6 million in financing for the rehabilitation of 20 aging affordable housing properties in Tennessee.
Greystone’s affordable housing preservation group worked with the Tennessee Housing Development Agency (THDA), the USDA’s Rural Housing Service (RHS) National Office and Tennessee State Office to coordinate and secure the financing.
“The effort will allow the transformation of a rural apartment portfolio in need of immediate attention,” said Tanya Eastwood, head of Greystone’s affordable housing preservation group.
The aged USDA Rural Development Section 515 properties, comprising 793 apartment homes serving low-income households in 16 counties across the state, are owned and operated by The Hallmark Companies.
The public and private financing includes $19.3 million in senior long-term debt via USDA guaranteed 538 loans and $2.6 million in USDA 515 loans from Greystone Servicing Corporation; and a single issuance of $28 million in multifamily private activity tax-exempt bonds by The Health, Educational and Housing Facilities Board of Sevier County, Tennessee, through a public offering facilitated by Stifel, Nicolaus & Company.
It also includes the assumption and subordination of $21.8 million of original USDA Section 515 debt, and the purchase of 4% Federal LIHTCs by Boston Financial Investment Management, generating over $16 million in capital contributions.
The rehabilitation plan calls for a 12-month construction process marked by interior and exterior improvements, with emphasis on “promoting energy efficiency, thermal comfort and overall health of the residents. Formula Construction Group of Roswell, GA will serve as General Contractor.
“The preservation of aging RD Section 515 properties is a challenging segment of the affordable housing industry,” said USDA Rural Development State Housing Program Director Don Harris. “Thousands of properties face maturing mortgages in the next several years and are also at the end of their original restrictive-use periods.”