AUSTIN, Texas; DOUGLASVILLE, Ga.; and MOBILE, Ala. — BWE has arranged $15.3 million in permanent loans to finance three affordable housing communities in Austin, Douglasville and Mobile.
Jon Killough and Tony Love originated the loans using HUD’s RAD for PRAC initiative, a new tool designed to preserve existing Section 202 housing as well as create new Section 8 housing across the country.
Traditionally, Section 202 PRAC rental assistance could only be used for operating expenses, not debt servicing. The RAD for PRAC process allows borrowers to convert PRAC subsidies to project-based Section 8 contracts, which boosts the rental subsidy to a level that can pay for both operating costs and debt service, while also bringing more project-based Section 8 homes to the market. These transactions represent some of the first multifamily RAD for PRAC executions in the country.
“For aging portfolios in need of repairs and refinancing, RAD for PRAC is a powerful tool to inject new capital into affordable housing properties. BWE is proud to execute the first ever RAD for PRAC deal in Alabama and among the first in Georgia and Texas,” says Killough. “As we look for new ways to combat the housing crisis, we will continue to lead the way in utilizing RAD for PRAC to bring much-needed financing to affordable housing across the country.”
Of the three transactions, two were for affordable seniors housing communities.
BWE arranged a $7.8 million loan to finance construction of Sweetwater Point in Douglasville. The 96-unit, garden-style, three-story community will be restricted to residents age 62 and older. The property will include 55 one-bedroom units and 41 two-bedroom units, and all units will be affordable to residents earning at or below 60 percent area median income (AMI). The loan was originated with Freddie Mac and has a 17-year, fixed-rate term with a 40-year amortization.
BWE also arranged a $1.5 million HUD-insured Section 221(d)(4) loan to finance the construction of La Vista de Lopez in Austin. The 27-unit apartment building will be reserved for lower-income seniors.
The apartments at La Vista de Lopez will be affordable to residents earning at or below 50 percent AMI. The development has also received a HUD Section 202 Capital Advance loan, and it is the first multifamily property in the country to combine an FHA-insured new construction mortgage with a new Section 202 Capital Advance. The Section 221(d)4 loan has a 40-year term with a 40-year amortization period.
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