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November 30, 2016

Sims Mortgage Funding Closes $20,677,900 Loan For Construction of Multifamily Rental Housing in Lafayette, LA

Partnered Right
  • Vintage Realty Company was looking for financing for the Reserve at Couret Farms, a proposed 175-unit market-rate project to be located in a Traditional Neighborhood Development (TND) in an up-and-coming area of Lafayette.
Structured Right
  • SMF obtained key waivers from HUD that shortened the financing timeframe and maximized loan proceeds by underwriting at a higher loan-to-cost ratio.
Executed Right
  • The timeframe from submission of the mortgage insurance application to closing was slightly under 6 months.
Financed Right
  • SMF has closed 19 HUD-insured loans, totaling $278 million, for Vintage since 2002.
Partnered Right

Vintage Realty Company, a major regional developer and property manager headquartered in Shreveport, LA, formed a joint venture with Southern Lifestyle Development, a Lafayette-based developer with experience in Traditional Neighborhood Development (TND) projects. The development team, passing on conventional financing options, turned to Sims Mortgage Funding to obtain HUD-insured construction and permanent financing for the Reserve at Couret Farms.

Structured Right

SMF obtained waivers from HUD that allowed us to bypass the preliminary application stage, and to underwrite the loan at the higher loan-to-cost and lower debt service coverage ratios that would be going into effect well after the application was filed. These waivers shortened the financing schedule, helping to avoid an escalation of construction costs, and enabled the borrower to maximize loan proceeds.

Executed Right

The $20,677,900 loan was insured under the Section 221(d)(4) program and was underwritten at 85% of replacement cost. The loan features a 40-year amortization commencing 4 months after construction and a fixed interest rate that was considerably below projections. The debt service coverage ratio is 1.31. Closing escrows were approximately $1.76 million.

Financed Right®

SMF successfully obtained construction and permanent financing for a start-up project at a competitive, fixed, long-term interest rate, and on better terms than were available through commercial financing options. HUD mortgage insurance is an excellent source of capital for the development of market-rate rental housing, and, under certain conditions, age-restricted senior housing. It is also a competitive source of capital to refinance or acquire existing projects, and to expand or renovate existing, HUD-insured properties with supplemental financing.

For additional information, please contact Kerrie Tomasiewicz at 201-307-9383 or ktomasiewicz@nullsimsmortgage.com.

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