Freddie Mac and RBC Capital Markets’ Tax Credit Equity Group have closed a $180 million Low-Income Housing Tax Credit Fund, and they have already completed several transactions. Ten transactions have closed, including two in Puerto Rico and eight in New York, South Carolina, Tennessee, Texas and West Virginia.

The closing marks Freddie Mac’s fourth LIHTC fund since re-entering the market in 2018, and the first fund managed by RBCCM. The LIHTC program is the mechanism used to finance a majority of affordable rental housing across in the U.S.

Freddie Mac and RBC fund will invest in the development and preservation of affordable rental housing across the U.S. and Puerto Rico. The focus is on transactions in areas that have been underserved over the past decade, such as rural communities and intensive supportive services for their residents. It will also invest in supportive housing for special needs populations and housing in disaster affected areas.

The two investments in Puerto Rico serve the Caguas community that hurricanes Irma and Maria devastated in September 2017, and help build the José Gautier Benítez mixed-finance communities, on the site of a demolished public housing development.

The 238-unit family phase will receive a $37.5 million LIHTC equity investment, and the 200-unit senior phase will receive a $28.9 million investment. Together with $38.5 million in Community Development Block Grant-Disaster Recovery funds and $23.2 million in other public funds, funding for these developments is a substantial public-private partnership to assist Puerto Ricans most affected by natural disasters.

The buildings will have separate community rooms, on-site management offices, and a common area and courtyard. More than 80 percent of the family units will be affordable to tenants earning 60 percent or less of area median Income, and all the senior units will be affordable to seniors age 62 or older making 60 percent or less of the area median income.

The buildings have been designed to withstand future hurricanes and tropical storms and include backup generators that are sufficient to power the entire development in the event of a prolonged outage.

“Our fund will provide stability to underserved markets and deliver equity capital for affordable housing to communities across the U.S.,” said David Leopold, vice president of targeted affordable sales and investments at Freddie Mac. “The investments in Puerto Rico are particularly important to us. We all watched with horror as hurricanes ravaged the island and residents went without power for months. Among its many important investments, our fund with RBCCM is helping to build housing that is both affordable and resilient to future storms.”

Greystone, a commercial real estate lending company, has provided a $14,796,000 million Freddie Mac loan for the acquisition of SouthGlenn Place, a multifamily property located in Denver. The financing was originated by Ana Ramos of Greystone’s Los Angeles office, while both the seller and buyer were represented by Greystone Unique Apartment Group.

[caption id="attachment_9227" align="alignright" width="214"] SouthGlenn Place in Denver.[/caption]

SouthGlenn Place is a 135-unit, 74,575 square foot apartment complex witha significant value-add upside potential. The Freddie Mac Value Add loan program was used to enable the new owner to perform property upgrades and increase the value of the property over time, with the new owner budgeting approximately $1.6 million for upgrades. The non-recourse loan includes a 3-year term with the entire term being interest-only.

“Working closely with the Unique Apartment Group, we helped guide the buyer through the acquisitions process and to understand the benefits of the Freddie Mac Value Add program,” said Ramos. “It’s been a pleasure collaborating with the investment sales team on an end-to-end process from acquisition to financing.”

NAPA Ventures has sold four Dallas-based properties--Westwood Apartments, Ravenwood Apartments, Oates Creek Apartments and Brandon Mill Apartments.

Combined these units make up roughly 700 of NAPA's almost 4000-unit portfolio, and are the latest sales completed by the real-estate investment firm.

"As simple as it sounds, we executed our business plan and sold the assets," said Glenn Gonzales, Co-CEO of NAPA. "A hot Dallas market coupled with years of experience has led us to great success here."

[caption id="attachment_9201" align="alignright" width="300"] Dallas[/caption]

NAPA's business plan going in was to renovate the exterior of buildings and interior units of each property to increase profitability and provide a great living experience for its residents. These updates include a tremendous improvement to amenities, makeover of landscaping, parking lots, exterior paint and upgrading the exterior lighting. Interior unit renovations include: upgrades to countertops, cabinets, floors, two-tone paint, and trendsetting black appliances.

"We do three things very well – we find value where others can't, fix things that are broken and make our equity partners happy. That is what we did here," said Shravan Parsi, Co-CEO of NAPA. "NAPA planned to exit the properties in three to five years, however, we exceeded our three-year projected returns and exited the deal.”

With the disposition of Ravenwood, Oates Creek, Brandon Mill and Westwood, NAPA plans to sell its 650-unit Montecito Creek Apartment Homes in Mesquite, Texas, and its 159-unit Pleasant Creek Apartments in Lancaster, Texas early this year.

NAPA has a strong pipeline of Multifamily & CRE deals with planned off-market acquisitions in all the major markets of Texas.