Love Funding closed a $9.9 million loan to purchase and significantly rehabilitate Newman Court Apartments, an affordable community in Pontiac, Michigan.
Newman Court Apartments offers 172 one-, two- and three-bedroom units. The apartments are located in 19 one- and two-story buildings originally constructed in 1971 and 1972. The property will undergo significant renovations through the use of 4 percent low-income housing tax credits (LIHTCs) allocated by the Michigan State Housing Development Authority. All of the apartments will continue to be tax-credit-restricted under a new 20-year Section 8 HAP contract.
The financing was secured by Love Funding’s Cleveland office through the U.S. Department of Housing and Urban Development’s 223(f) loan insurance program. The HUD program provided the development team with low-rate, non-recourse financing for a 35-year term. The City of Pontiac approved the property for payment in lieu of taxes (PILOT), which will set annual property taxes at 7 percent for the full length of the mortgage term.
The ownership group, MHT, is a not-for-profit affordable housing corporation that has been serving Michigan and the Pacific Northwest since 1990. MHT will continue to employ Continental Management, a fully-integrated property management company with experience in the affordable housing industry. The general contractor for the rehabilitation project is Continental Construction Management.