Challenge: This Section 232(f) refinancing was initially rejected by HUD’s underwriting staff when the 2008 economic downturn reduced the property’s occupancy from 95 percent to below 85 percent.

Solution: Wagenknecht, recognizing the vacancy issue as a temporary phenomenon, resubmitted the refinancing application a year later, when the property’s owners were able to boost occupancy back near pre-recession levels. HUD approved the transaction, and now ownership is working with Wagenknecht to refinance another property in its portfolio.

Deal Insider provides insights into Love Funding’s recent loan closings, with an emphasis on how the originator helped the client address a specific challenge.

New online database promotes Section 3 hiring and contracting opportunities for Detroit businesses and residents

WASHINGTON – More very low-income senior citizens in Michigan will have access to affordable supportive housing thanks to $11.7 million in housing assistance announced today by the U.S. Department of Housing and Urban Development (HUD). The funding announced today will help non-profit organizations produce additional accessible housing, offer rental assistance, and facilitate supportive services for the elderly.

The capital advances and rental subsidies are provided through HUD’s Section 202 Supportive Housing for the Elderly Program. Last November, HUD announced $545 million in Section 202 grants nationwide to 97 grantees in 31 States and Puerto Rico. In addition to funding the construction, acquisition, and rehabilitation of multifamily developments, HUD’s Section 202 program also provides million of dollars in rental assistance so that residents in selected developments only pay 30 percent of their adjusted income.

“The Obama Administration is committed to helping our senior citizens find an affordable place to live that is close to needed healthcare services and transportation,” said HUD Secretary Shaun Donovan. “These grants and continued rental subsidies will help provide critically needed housing to some of our most vulnerable citizens.”

Continue reading on HUD.gov

Bruce Gerhart and Robert Smallwood of Love Funding’s Cleveland office secured the loans through the U.S. Department of Housing and Urban Development’s 232/223(a)(7) LEAN loan program, which enables streamlined refinancing of mortgage debt previously insured by the agency.

Love Funding was able to manage the timing of the transaction to reduce the impact of a prepayment penalty on the existing debt, dropping it from 9 percent to 5 percent, and they cut the monthly replacement reserve deposit by more than half after extending the loan back to its original 30-year term. Combined with locking in a significantly lower interest rate, the moves will save the borrower more than $120,000 annually over the next 10 years.

Last month, Gerhart and Smallwood teamed up on the refinancing of five loans totaling $19.9 million for a portfolio of assisted living facilities in Michigan.

Love Funding Director Brian Robertson of the St. Louis office secured the financing through the U.S. Department of Housing and Urban Development’s 232/223(a)(7) LEAN loan program, which allows for a streamlined refinancing of existing HUD-insured properties. Using the program enabled Robertson to lock in a low interest rate and extend the loan back to its original 35-year term, generating nearly $152,000 in annual debt service savings.

Rosemont founder G. Barron Rush Jr. was one of the pioneers in building and developing assisted living communities to serve residents who required assistance with the tasks of daily living. Barron Management, established in 1958, is in its third generation of Rush family ownership and oversees operations at the Kingwood facility, in addition to other Rosemont assisted living communities in West Monroe, Louisiana, and Santa Fe, New Mexico.

Robertson also closed on a $2.4 million HUD refinancing on the West Monroe facility this week.