Oak Grove Capital recently originated an $11.1 million FHA 223(f) loan for Lyndale Plaza Apartments, a 94-unit affordable-housing community in Richfield, Minn.
The 35-year, fully amortizing loan was used to repay existing debt and obtain a fixed interest rate.
Lyndale Plaza Apartments is a Class-A property with 20 percent of its units set aside for low-income tenants. Completed in November of 2012, the property sits in a transit-oriented location.
The original financing package included 4 percent tax credits, tax increment financing through the city of Richfield and a floating-rate tax exempt bond issuance from the state of Minnesota. Oak Grove was able to obtain a waiver to HUD’s “3-year rule” and structure a long-term, fixed-rate FHA loan that not only locked in financing costs over the entire life of the property, but allowed the borrower to pay for cost overruns that occurred during construction.
Ken Dayton, managing director of Oak Grove Capital’s St. Paul, Minn., office, said in a written statement, “It’s situations like this where we can really add value for our clients. Our extensive knowledge of what can be accomplished through HUD, and not just what’s outlined in the HUD Guide, allowed our client to obtain long-term, fixed-rate financing three full years ahead of schedule.”
