News - 2008
2005-041
RED Provides Comprehensive Financing for Two Properties in Ohio
Columbus, OH, December 12, 2005 – Red Capital Markets, Inc. (MEMBER FINRA/SIPC) and Red Mortgage Capital, Inc., the investment banking and mortgage banking entities, respectively, of comprehensive capital provider, RED CAPITAL GROUP, structured the financing of two multifamily apartment properties in Toledo, Ohio.
Regina Manor Apartments , built in 1968,and Moody Manor Apartments, built in 1973,collectively house 299 units. The projects qualified under HUD’s mark-to-market program for properties where the project based Section 8 rents are above market rents. The borrower needed to structure the refinancing in a manner to not only meet the mark-to-market parameters but to fund a significant amount of renovations required at the properties.
The financing structure implemented for the borrowers, Moody Manor, LLC and ReginaManor, LLC, included FHA Section 223(a)(7) mortgage loans processed by Red Mortgage Capital, Inc., and bond underwriting services provided by Red Capital Markets, Inc. National City Community Development Corporation syndicated 4% tax credits to benefit the projects, while the Ohio Housing Finance Agency served as issuer of $7.42 million in tax-exempt bonds.
The transaction is one of a select few 4% tax credit transactions combined with a mark-to-market FHA-insured mortgage that have been completed in conjunction with the de-coupling of an Interest Reduction Payment ("IRP"). As a result of the financing, each property will benefit from rehabilitation, the scope of which work will include the replacement of windows and patio back doors, kitchen cabinets and counter tops as needed, floor coverings, furnaces and central air conditioning, in addition to roof replacement, parking lot resurfacing and the construction of two new playgrounds.
Bradley C. Cain, Assistant Vice President of Red Capital Markets, Inc., said "The complexity of this deal included mark-to-market restructuring, IRP de-coupling, tax-exempt bonds and tax credits which required the financing team to be flexible and innovative. This included structuring short term tax-exempt bonds which were issued to meet tax credit requirements."
