Developer Jonathan Rose is entering the bridging loan business.
The company’s financial arm, Rose Community Capital (RCC), launched its new Impact Bridge loan program with a $ 15 million deal in La Puente, California.
The short-term interim financing will fund the acquisition of Sunny Garden Apartments, an affordable senior 96-unit multi-family property (top photo), on behalf of Alliance Property Group Inc. (APG) and Community Revitalization & Development Corporation ( CRDC), a non-profit corporation. Joshua Ross and Eli Appel of Marcus & Millichap represented the buyer and seller.
The financing represents the first loan to close under the new program, aimed specifically at preserving existing affordable housing through the origination, underwriting and placement of multi-family mortgages insured by the FHA,
âWe have worked closely with our financial partner, IMPACT Community Capital, to structure a bridge loan initiative that will help ensure the affordability of Sunny Garden and similar projects in the future,â said Kelly Boyer, president of Rose Community Capital. .
âIn this project, most of the residents have a family income of 30% or less of the MAI and would face economic displacement if the project were converted at the market rate. This acquisition and the placement of public grants across Los Angeles County have ensured that Sunny Garden Apartments remains affordable for current and future residents.
The subordinated debt was provided by Century Housing Corporation.
The developer is planning an $ 18 million improvement program at the property built in 1992 at 13712 Sunkist Drive. Project sponsors will work with Partner Energy and Musser Architects, Inc. to achieve as much energy efficiency as possible in Sunny Garden and meet California green building codes.
Additionally, the developer has chosen to design upgrades to achieve a 20% improvement over the property’s baseline energy consumption. These design elements will include EnergyStar appliances; low flow toilets and shower heads; water-friendly landscaping; LED lighting; solid surface counters and cabinets; and other energy efficiency measures.
The development will be repositioned through a Federal Housing Agency (FHA) debt and equity execution structured by RCC, an FHA specialist.
Los Angeles County is supporting the project and making vouchers based on the project available that will cover 92.6% of the apartments. The RCC is arranging on-going funding through an FHA 221 (d) (4) loan in the amount of just over $ 20 million and the new owners have requested a 4% allotment of loans. Low Income Housing Tax (LIHTC) totaling nearly $ 7.9 million and a Los Angeles County Development Authority (LACDA) loan of over $ 2.1 million.
Jonathan Rose Companies has been in the lending business for over five years when it acquired the FHA lending arm of Forest City along with their affordable housing, management and securities businesses in 2015 and made over $ 400 million. loan dollars.
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