A joint venture between Pennrose Holdings, Acacia Real Estate Development and an affiliate of the New York City Housing Authority (NYCHA) has landed a $117.4 million Freddie Mac unfunded forward loan for Hope Gardens, a portfolio of affordable housing communities in Brooklyn’s Bushwick neighborhood, Commercial Observer has learned.
The Freddie Mac loan features a three-year rate lock and serves as construction take-out financing. It features a low, fixed-interest rate with a 30-year term and 40-year amortization. In addition to the Freddie Mac loan, other funding sources that were part of the transaction included low-income housing tax credit (LIHTC) equity, a seller note, and a deferred developer fee.
Lument arranged the financing with a team led by Josh Reiss.
Hope Gardens consists of 60 multifamily properties near one community center building. Built from 1980 to 1987, the portfolio contains 1,321 total units in garden-style, mid-rise, and high-rise buildings ranging from three to 14 stories tall. All the units are subsidized by long-term Section 8 contracts. In addition to the residential units, the community features a daycare and two senior centers, according to a release.
“Helping preserve and enhance an important source of affordable housing like Hope Gardens is one of the highlights of this profession,” said Reiss. “The closing allows the client to complete the substantial rehabilitation of the properties with lower-cost, short-term financing and then close into permanent financing with the Freddie Mac tax-exempt loan, which offers the benefits of long-term, fixed-rate debt.”
The closing marks the first of two financings for Hope Gardens between Lument and the sponsor, as a second portfolio is scheduled to close in late July. In aggregate, Hope Gardens will carry approximately $190 million of Freddie Mac permanent financing once the second transaction is completed, according to the release,
Pennrose Holdings, Acacia Real Estate Development and NYCHA did not immediately respond to requests for comment.
Emily Fu can be reached at firstname.lastname@example.org.