The Boise City Ada County Housing Authority (BCHA) has been striving to enhance their community by providing safe and affordable housing and fostering self-sufficiency and stability for people in need since 1967. Centennial Mortgage (CMI) was delighted to help them in their mission by refinancing five of their developments totaling 243 units with five separate FHA Section 223 (f) loans totaling more than $13.5 million.
CMI refinanced five developments, Liberty Park, Nez Perce, Shoreline Plaza, Shoreline Plaza North, and Vine Terrace after unsuccessful attempts by other mortgage companies. According to Sunny Fitzgerald, Vice President of Affordable Housing Originations at CMI, “These transactions were complicated and extremely time sensitive because all five loans had to close simultaneously to align with a limited annual bond redemption window that did not allow for partial redemption.”
“Boise is a very competitive rental market so the preservation of our developments and our affordable housing mission also had to make good business sense and allow for flexibility. By financing each development separately, as a single asset LLC’s with the ability to generate surplus cash, we can respond to market and our mission demands,” said Bob Reed, Director of Development at BCHA. “And the fact that the loans are non-recourse to BCHA means we limit our contingent liabilities putting us in a stronger financial position.”
Marketability was enhanced with more than $280,000 for capital repairs and improvements at all five developments. In addition, reserve for replacement accounts, were enhanced with sufficient funding which will ensure the capital needs of these developments into the future.
The affordability mission was fortified with an overall reduction in annual debt service primarily the result of new interest rates at half the level of the previous tax exempt bond. And, while only one of the developments is subsidized with Section 8, BCHA voluntarily recorded affordability covenants on the other four developments that allowed them to take advantage of a reduced FHA Mortgage Insurance Premium (MIP). The financing was accomplished while in the middle of the HUD Western Region’s Multifamily Transformation. After a concept meeting in Seattle, underwriting for the loans took place in the Denver Office, Asset Management in San Francisco and Legal in Seattle. According to Matt Kane, President of CMI, “This required significant coordination between HUD offices and we are grateful for their professionalism and determination.”
Centennial Mortgage is a mortgage bank providing capital through a variety of U.S. Department of Housing and Urban Development (HUD) and U.S. Department of Agriculture (USDA) insured loan programs. Founded in 1975, Centennial Mortgage, Inc. (CMI) provides real estate financial services to owners and developers of multifamily housing, hospitals, nursing homes, and board and care facilities throughout the nation.
Sunny Fitzgerald has successfully financed innovative and complex affordable and subsidized multifamily housing and healthcare projects utilizing HUD and Fannie Mae and USDA. Taking a consultative, creative and collaborative approach, Sunny is an advocate for her clients and their mission to preserve and grow affordable housing stock.
Sunny can be reached at 206-641-9935 or firstname.lastname@example.org.