New York, NY — Lument has provided a $15.5 million Fannie Mae DUS® Multifamily Affordable Housing (MAH) loan to refinance Redbird Trails Apartments, a 252-unit affordable multifamily community in Dallas, Texas. Chad Musgrove, vice president, led the transaction for Lument.
Originally built in 1985, Redbird Trails Apartments consists of 21 two- and three-story apartment buildings containing one- and two-bedroom units. The community has been owned and operated by the current sponsor since 1992. Substantial capital improvements totaling $463,000 have been made in recent years. Approximately 20% of units are reserved for renters at or below 50% of area median income (AMI), and 80% of units are reserved for renters at or below 60% of AMI.
To further improve the community and position it for long-term success, the sponsor sought a Fannie Mae refinance that would allow for cash-out proceeds to be used both for renovations and to invest in acquiring additional multifamily real estate.
“The Fannie Mae affordable multifamily loan proved to be an optimal solution,” said Musgrove. “Not only did it we put in place a lower interest rate, we were able to obtain significant cash-out proceeds that the sponsor can use to further improve the property and its business.”
During the loan process, the Dallas area was impacted by a severe winter storm that caused substantial damage to the community, including flooding and fire damage. Musgrove, working with Lument’s asset management department, acted quickly to assist the sponsor in setting up an escrow fund for immediate repairs and other tenant needs.
“Despite the disruption caused by the winter storm, we were still able to close the loan in a timely manner and assist the sponsor in achieving all their objectives,” added Musgrove.
The Fannie Mae loan features a 12-year term, 30-year amortization period and low, fixed interest rate. In addition, it provides for approximately $600,000 for planned capital expenditures and renovations. The broker on the transaction was Gayle Bulls Dixon of Dixon Link Capital, a woman-owned mortgage brokerage firm based in Florida.
ORIX Real Estate Capital Holdings, LLC, d/b/a Lument, is a subsidiary of ORIX Corporation USA. Lument is a national leader in commercial real estate finance. As the combined organization of legacy industry experts Hunt Real Estate Capital, Lancaster Pollard, and RED Capital Group, Lument delivers a comprehensive set of capital solutions customized for investors in multifamily, affordable housing, and seniors housing and healthcare real estate. Lument is a Fannie Mae DUS®, Freddie Mac Optigo®, FHA, and USDA lender. In addition, Lument offers a suite of proprietary commercial lending, investment banking, and investment management solutions. Securities, investment banking, and advisory services are provided through OREC Securities, LLC, d/b/a Lument Securities, Member FINRA/SIPC. Investment advisory services are provided by OREC Investment Management, LLC, d/b/a Lument Investment Management. OREC Investment Management is registered as an investment adviser with the U.S. Securities and Exchange Commission. For more information, visit www.lument.com.