Financing secured through restructuring of long-term, FHA-insured bond financing
Greystone announced that it has restructured a 40-year bond deal to provide a $5.2 million FHA loan to refinance Savannah Summit Apartments, a multifamily property located in Savannah, Georgia. Jonathan Rosenberg, an FHA originator with expertise in tax-exempt bonds in Greystone's multifamily lending group, structured the transaction.
Originally financed in 2003 as a GNMA collateralized bond-deal, Greystone was able to obtain the necessary approvals to structure financing around the lock, permitting the borrower to refinance the underlying debt now, taking advantage of the unprecedented interest rate environment, well in advance of the date in which it would have been eligible for refinancing due to the lockout. Greystone provided a new FHA loan, through HUD's Section 223(a)(7) program, at a substantially reduced interest rate. The new loan has the benefit of a 40-year amortization period. This is the second restructuring of its kind that Greystone has closed recently. The other transaction was locked out until 2015 but was able to be refinanced two years earlier than previously considered possible.
"We are thrilled to have been able to structure this unique refinancing opportunity for Ambling" said Betsy Vartanian, Head of Greystone's FHA business. "It is a challenge to restructure the debt before the bonds are callable. To our knowledge, no other lenders have been successful in this arena. Greystone was founded in 1988 with an initial objective to restructure defaulted bond deals. Our firm has extensive experience and we are able to effectively negotiate and collaborate with bondholders and all other necessary parties to waive lockout provisions. Moreover, this transaction was done with no significant out-of-pocket expense to the borrower".
Continued Vartanian, "While not widely known, we are seeing significant opportunities in the market for deals of this nature. Although only a small percentage of bonds can be restructured during the lock-out period, all borrowers should explore whether they can take advantage of this unique option."
Greystone's multifamily and healthcare mortgage lending group consists of over 200 individuals located in offices throughout the United States. For more information on Greystone's financing solutions please visit https://greyco.wpengine.com/multifamily