News - 2007

Columbus, Ohio, December 12, 2007 – Comprehensive capital provider RED CAPITAL GROUP’s investment banking and mortgage banking entities, Red Capital Markets, Inc. (MEMBER FINRA/SIPC) and Red Mortgage Capital, Inc., respectively, recently provided financing that included low income housing tax credit equity syndication, Fannie Mae bond credit enhancement, tax-exempt bonds and privately placed subordinate bonds for a seniors housing development.

Redwood Villa, constructed in 1988, is a 92-unit affordable housing community for seniors consisting of two 2-story residential buildings connected by ground level and upper level walkways. Amenities include club house, laundry room, elevator, landscaped courtyards with several seating areas, controlled access gates, washer/dryer hookups in each unit, emergency pull cords and patios/balconies with storage areas.

Originally financed in 1988 with various sources of debt and equity capital, including a State of California Rental Housing Construction Program (RHCP) loan, the State of California RHCP program granted the project’s sponsor, San Diego Interfaith Housing Foundation, permission to refinance and rehabilitate the project using $6,050,000 in tax-exempt bonds and 4% LIHTC equity syndicated by Red Capital Markets, Inc. Red Mortgage Capital, Inc. served as Fannie Mae DUS lender for $2,470,000 in bond enhancement while the remaining balance of $3,580,000 subordinated tax exempt bonds were privately placed. Approximately $1.7 million in capital improvement monies were generated for the project.

The recapitalization of this project using bonds and credits accomplished multiple goals, including repayment of the State's RHCP debt on the property and repayment of previous "soft loans" made to the project by the San Diego Housing Commission, as well as substantial rehabilitation of the asset and extension of the affordability term of the project thereby strengthening its overall long term operating feasibility.

Matthew B. Jumper, President of San Diego Interfaith Housing Corporation, said, "The preservation of Redwood Villa has been a goal of Interfaith for many years. We have created a win-win for all parties, including the residents. Not only did we pay back the State RHCP program and the San Diego Housing Commission, but we have been able to expand the number of affordable units, the affordability period and rehabilitate the property for the long-term benefit of our residents. We couldn't be more happy with the outcome and grateful to Red Capital."

Evan E. Becker, Managing Director of Red Capital Markets, Inc. and lead banker on the transaction said, "Absent the approach taken by San Diego Interfaith, using the financing tools provided by RED, this asset likely would have lost its physical and economic viability, and been lost as an affordable housing resource in a community that has a huge need. San Diego Interfaith and its team and the State of California did a remarkable job structuring this ‘win-win’ approach."