Restructured Bond Deal is Refinanced to Reduce Defeasance Burden and Lower Interest Rate
Greystone restructured and refinanced a $4.2 million loan on a 99-unit affordable housing complex, resolving certain lock-out issues and effectively eliminating defeasance costs, which were estimated to exceed $500k.
Knoxville, Tenn.-based Lawler Wood Housing, a leading affordable housing developer, had a bond financed FHA-insured construction loan under section 221(d)(4) for Lake Road Apartments in High Point, North Carolina, which was locked out for refinancing until October 2015. By purchasing the bonds in the secondary market and working alongside the Issuer and trustee to restructure the bonds, Greystone facilitated a voluntary waiver of the lock-out provision. Greystone then provided an FHA-insured 223(a)(7) loan, thereby enabling the borrower to take advantage of the favorable interest rate environment. Jonathan Rosenberg, an originator at Greystone with expertise in affordable housing finance and tax-exempt bonds, structured the transaction on behalf of Lawler Wood Housing.
“Greystone’s expertise lies in finding solutions where there may be roadblocks; in this case, we applied our ingenuity to a situation where a lock-out provision, if not waived, would have precluded the owner from economically refinancing,” said Betsy Vartanian, head of Greystone’s FHA lending group. “Multifamily owners may not necessarily be constricted by loan lock-outs in some cases, and these are situations where Greystone’s knowledge of the secondary bond markets, combined with our deep work-out expertise can provide borrowers with options and, ultimately, cost savings,” she added.
Greystone provides mortgage finance solutions across multiple platforms, including FHA, Fannie Mae, Freddie Mac, USDA, CMBS, bridge, mezzanine and other proprietary loan programs. In 2013, Greystone was ranked #1 in combined multifamily and healthcare FHA lending, ranked #1 in Small Loans and #3 in Affordable Housing as a Fannie Mae DUS lender, and a top-5 Freddie Mac lender for seniors housing.