Walker & Dunlop, Inc. has closed a $7.7 million loan for Glen Oak Towers, a federally subsidized high rise, catering to senior citizens, in Peoria, Illinois.
Glen Oak Towers was the first transaction to convert a Moderate Rehabilitation Section 8 contract to a Project Based Rental Assistance (PBRA) contract under the Rental Assistance Demonstration (RAD) program.
The borrower, Scott Canel & Associates, acquired and rehabilitated an older Section 8 property using the United States Housing and Urban Development (HUD) 223(f) program under tax credit pilot, thus avoiding the higher costs and rates of 221(d)(4).
In addition, the borrower was able to use the Government National Mortgage Association (GNMA) tax exempt taxable swap structure to reduce transaction costs and obtain a lower interest rate.
Glen Oaks Tower was built in 1954 and rehabbed in 1984-85 with the goal of preserving low-income housing to seniors and people with disabilities.
The borrower intends to provide significant renovations to the 168-unit property which includes the replacement of all windows, modernizing the elevator system and renovating all interior units.
In addition, the four ground floor commercial spaces will be converted into fully accessible residential units, increasing the total unit count from 168 to 171 units. Property amenities include a community room, onsite laundry facilities, intercom/electronic entry, and video surveillance.
Additionally, the surrounding properties are predominantly commercial use with an abundance of medical care and hospitals in the immediate area, including Saint Francis Medical Center, Methodist Medical Center and Illinois Medical Center, which makes the property appealing for prospective senior residents.