News - 2008
2006-046
Whispering Hills Receives Comprehensive Debt & Equity Capital for Acquisition/Rehab of Affordable Housing Property in Oklahoma
RED Executes Complex Financing
Columbus, OH, November 9, 2006 - Various entities of comprehensive capital provider RED CAPITAL GROUP provided a construction loan, LIHTC equity, a supplemental loan, and a commitment for permanent financing to facilitate the substantial rehabilitation of an affordable multifamily property in Stillwater, Oklahoma.
Whispering Hills Apartments, originally built in 1972 under the HUD Section 236 loan program, is the beneficiary of an Interest Reduction Payments ("IRP") subsidy and a project-based Housing Assistance Payment ("HAP") rental subsidy. Comprised of nine buildings on 4.6 acres, Whispering Hills Apartments is located approximately two miles south of the Stillwater Central Business District.
The new financing allowed for retirement of the Section 236 loan and the decoupling of the remaining IRP subsidy. In addition, approximately $36,500 per unit in hard costs will be spent on the substantial rehabilitation of the property including the addition of new pitched roofs, replacement of all heating and air conditioning units, appliances, cabinets, electrical breakers, carpet, windows and doors, as well as paving and site drainage improvements. Construction is expected to be completed in December 2007. All of the units will be rent restricted and reserved for residents earning no more than 50% and 60% of Area Median Income.
Red Capital Markets, Inc. (MEMBER FINRA/SIPC) arranged for a $2,703,000 construction loan from Red Capital Community Development Company, LLC and also served as equity placement agent to syndicate $3,304,550 in low income housing tax credits. A top ten Fannie Mae DUS lender, Red Mortgage Capital, Inc. provided a $1,438,000 Fannie Mae DUS Forward Commitment for permanent financing, and Red Capital Advisors, LLC funded an IRP loan of $265,300.
The project sponsor, James L. Rice, has extensive experience in the affordable housing sector and formed Arzon Development Company, LLC for the purpose of management, preservation, and restoration of affordable housing.
David C. Martin, Senior Managing Director of Red Capital Markets, Inc. said, "Red Capital is pleased to announce the closing of Whispering Hills. Through the tireless efforts of Mr. Rice and his team, Red Capital was able to provide all financing components from construction through stabilized operations for this complex transaction. The funds will allow Mr. Rice to preserve this much needed affordable housing for the Stillwater residents. We hope Whispering Hills will be the first in a long line of successful transactions between Red Capital and Mr. Rice."
Jim Rice, President of Arzon Development said, "We are extremely pleased to complete this debt and equity trans action with Red Capital. Red brought the expertise required to deal with the complications inherent in mixing 9% tax credits with an IRP decoupling and Fannie Mae forward commitment. It presented a number of complex issues and I don't know anyone else that could have completed this transaction, especially given the timeframes. Red's equity and debt groups worked diligently to bring the transaction to a successful conclusion, and we look forward to our partnership with Red on this and other transactions."
