Sims Mortgage Funding closed out 2009 with a flourish, completing the last two (of five) scheduled financings for Providence Community Housing. Providence, a not-for-profit organization, was established in 2006 for the purpose of rebuilding affordable housing in New Orleans in the wake of Hurricane Katrina. In November we closed a $2,400,000 loan for Delille Inn, a 51-unit elderly housing project and in December we closed a $5,750,000 loan for St. John Berchman’s, a 150-unit elderly project.

The loans were insured under the Section 221(d)(4) substantial rehabilitation program and were structured on an “insurance upon completion” basis. The commitments for mortgage insurance, issued by HUD in April and June 2008, were part of a complex financing that included low-income housing tax credits and short-term bank debt that Providence used to acquire the projects in 2008. After the rehabilitation was completed and HUD completed its cost certification review in 2009, we obtained HUD approval for a $410,000 mortgage increase for Delille. With the higher loan amount, Providence was able to recover some of the additional rehabilitation costs it incurred without having to commit additional equity.