Greystone Affordable Housing Initiatives LLC announced the closing of a $130 million multifamily housing transaction in Florida. The 24 aged USDA Rural Development Section 515 properties, comprising 1,058 apartment homes serving low-income households in 12 counties across the state, are owned and operated by The Hallmark Companies, Inc.
In the statewide pooled transaction, Greystone’s affordable housing preservation group worked closely with USDA’s Rural Housing Service (RHS) National Office and Florida State Offices, as well as the Osceola County Housing Finance Authority and Florida Housing Finance Corporation to coordinate and secure the financing needed to acquire and rehabilitate this at-risk and much-needed housing.
“With each new preservation project we undertake, we see unique challenges, and without the collaboration of everyone involved, we would not be successful,” said Tanya Eastwood, President, Greystone Affordable Housing Initiatives. “Our ability to orchestrate such a complex repositioning is dependent upon the close cooperation of public and private sectors, and at the end of the day, what drives everyone to the finish line is the dedication to the hundreds of residents who will ultimately benefit from the rehabilitation of their homes. We are thankful for companies like Hallmark which see the critical importance of preserving affordable housing across rural America, and are proud to be their partner in this endeavor.”
“The preservation of aging affordable housing is an ongoing challenge we continue to face within the housing industry. There is a critical need for both the affordability and long-term physical viability of these multifamily housing communities in rural areas throughout the country. These homes are a valuable resource for both the elderly and families in local communities, who would otherwise not have access to safe, dependable and sanitary housing,” said Pete Petersen, President, The Hallmark Companies, Inc. “Our development team, investment partners and the two Florida housing agencies – USDA Rural Development and Florida Housing Finance Corporation – were able to come together to preserve over one thousand apartment homes across the state of Florida, and we are incredibly thankful to everyone that has worked on this project.”
The financing plan combined both public and private funding and included:
- Tax-Exempt Bonds – Single issuance of $41.6 million in multifamily private activity tax-exempt bonds by Osceola County. The short-term bonds received an A-1+ rating from Standard & Poor’s.
- Low-Income Housing Tax Credits – Purchase of 4% Federal LIHTCs by Boston Financial, generating $28.1 million in capital contributions.
- RHS 515 Debt – Assumption and subordination of $26.7 million of original USDA Section 515 debt. The Section 515 program is a direct loan program designed to provide subsidized loans to developers of affordable housing in rural markets. In addition, 62% of the 1,058 apartment units will continue to receive Section 521 Rental Assistance provided by RHS.
- Senior Debt of $29.9 million – Long-term debt comprised of a combination of $12.5 million in USDA guaranteed 538 loans, provided by Greystone Servicing Corporation, Inc., and $17.3 million in newly-issued Soft Second USDA loans.
- Other – Other funding sources included additional financial support of $4.5 million.
The rehabilitation plan includes a fast-paced construction process, estimated to be complete within 12 months, during which no residents will be permanently displaced. Substantial renovations, averaging $32,000 per unit, will include both interior and exterior improvements. Particular emphasis will be placed on bringing the properties, built between 1975 and 1995, up to modern standards, addressing accessibility, functional obsolescence and deterioration.
“We were pleased to assist in the Florida Hallmark RD financing that will facilitate a significant upgrade of existing affordable housing units in 12 counties throughout Florida. The cost efficiency created through the financing will translate into improved quality of life for residents in many rural areas in the state,” said Helen Feinberg, Managing Director, RBC Capital Markets, LLC.
“Osceola County Housing Finance Authority was pleased to play an important role in this complex transaction in furtherance of our mission to provide quality affordable housing for all Floridians,” said Rocky Owen, Chairman, Osceola County Housing Finance Authority. “OCHFA worked with Greystone and Hallmark to aggregate 24 small multifamily properties located around the state, each alone could not have been affordably rehabilitated, into a single statewide portfolio. Without relocating residents from their units, our residents will see the upgrade and modernization of 1,058 affordable rental housing units located in 12 counties, including three developments in Osceola County. The Osceola County Housing Finance Authority, through its issuance of tax-exempt bonds, worked with Greystone and Hallmark to provide quality affordable housing to our residents, at no cost to the taxpayers in Osceola County.”
“The federal Low Income Housing Tax Credit program is a great way to infuse private capital into the preservation of rental housing for low-income households,” said Steve Auger, Executive Director, Florida Housing Finance Corporation. “Through Greystone’s leveraging of non-competitive 4% tax credits, more than a thousand units in Florida will continue to be available to citizens who most need them, providing a safe, decent and affordable place for them to live.”