The Greystone Difference
Greystone offers a broad variety of loan products to facilitate the construction, acquisition, rehabilitation, and repositioning of multifamily affordable housing nationwide. We provide financing for affordable transactions that qualify for Fannie Mae, Freddie Mac and FHA programs. With a dedicated platform of experienced affordable housing professionals, Greystone can find the right solution for your affordable housing financing needs.
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Case Studies
THE SITUATION
Black Iris Capital is under contract to purchase a portfolio of 9 properties in Queens, NY totaling 753 units for $109.5 million, and simultaneously enter into an Article XI tax abatement, which requires the completion of $5.5 million in capital improvements and leasing the properties back up per affordability requirements set by the New York City Department of Housing Preservation and Development (“HPD”). At closing the Borrower will enter into an Article XI Regulatory Agreement with New York’s Housing Preservation & Development (“HPD”) that, for a period of 40 years, will reduce the real estate taxes to 5.0% of GPR in return for converting 100% of the units to affordable rent stabilized and 15% supportive housing. The purpose of the Loan is to facilitate the acquisition of the Portfolio, complete $5.50 million of capital renovations required by HPD, and lease up the Portfolio in accordance with the affordability covenants in preparation for a Freddie Mac Targeted Affordable Housing (“TAH”) loan refinance.
THE SOLUTION
Greystone leveraged the in-place cashflow, in conjunction with the increased future cash flow supported by affordability requirements. This created immediate value upon acquisition (due to the Article XI tax abatement).This combined with the strength of the Sponsor allowed Greystone to arrange high loan to cost financing in order to acquire the asset, fund renovations and closing costs. The loan was structured as an interest-only 5-year fully extended term, including 3, 12-month extension options.
THE RESULTS
The bridge loan enabled Back Iris Capital to acquire the asset without the need for additional equity from limited partners. With the funds and time to complete HPD's required capital improvements and comply with affordability requirements the borrower is well positioned to work with Greystone on securing a Freddie Mac Targeted Affordable Housing loan upon completion of the business plan, aligning the assets with long-term business objectives and ensuring the maintenance of affordable housing in the New York metro area. The transaction represented the collaboration and coordination between Black Iris Capital, HPD, our capital partner in Wells Fargo, Greystone, and many other constituents.
In 2014, the residents united to acquire the building under the DC Tenant Opportunity to Purchase Act, and in 2017 they partnered with the National Foundation for Affordable Housing Solutions to purchase the building. Fannie Mae® and Greystone provided $50 million of low-cost financing to keep Wah Luck House affordable.