St. Paul, Minn.-based Oak Grove Capital recently originated debt financing for a three-property affordable housing portfolio in Southern Florida totaling $46 million.
To originate the financing, Oak Grove Capital utilized Fannie Mae’s Structured ARM product. Each adjustable-rate loan carries a starting rate of about 2.55 percent on a seven-year term, and a 30-year amortization with a one-year lock-out and 1 percent fixed prepayment penalty thereafter.
By using Fannie Mae’s Structured ARM product, Oak Grove Capital provided its customer with low-cost financing, increased cash flow and significant flexibility in terms of early prepayment or convertibility to fixed-rate financing.
“We wanted to provide our customer with a low-cost solution that would generate the necessary proceeds to purchase the entire portfolio partnership interest while preserving the flexibility to take advantage of market conditions and opportunities in the future,” said Tim Leonhard, managing director of affordable housing for Oak Grove Capital. “This was a very complex transaction that had to close in 60 days, and we’re very pleased with the final product and execution that we were able to provide our customer.”
