Love Funding closed two loans totaling $16.4 million to build a new multifamily housing community for low-income residents in Ecorse, Michigan. Renaissance Estates of Ecorse is being built in two concurrent phases on the land that previously held the Wade H. McCree Plaza and Voisine Terraces Apartments. The project will replace the current units built between 1952 and 1962 with 200 affordable housing units spread across 16 new residential buildings.
The financing, which was secured by Love Funding Midwest Regional Director Bruce Gerhart and Associate Director David Strachan, represents the first time a borrower has taken advantage of both 4 percent and 9 percent low-income housing tax credits (LIHTC) for the same project in the state of Michigan.
The tax credits were granted by the Michigan State Housing Development Authority in tandem with mortgage insurance provided by the Department of Housing and Urban Development’s 221(d)(4) program. As part of the transaction, all of the units are being converted through HUD’s Rental Assistance Demonstration (RAD) Program, which transitions public housing units to private ownership while sustaining their affordability through long-term Section 8 contracts.
“This isn’t our first rodeo with Love Funding, but this has definitely been the most challenging and rewarding project to date,” said Ginosko Development President Amin Irving. “Had it not been for their creativity, problem solving and technical management of complex lending issues, this deal simply would not have closed. We truly appreciate the hard work of Bruce, Dave and the rest of the Love Funding team.”
The development team, which is led by Ginosko Development Co., had previously contemplated building all 200 units in one phase, but transitioned to a two-phase approach after LIHTC pricing dropped. This allowed the team to retain the previously allocated 9 percent LIHTCs while also pursuing a 4 percent LIHTC allocation. In addition to the construction loan, the transaction also required an equity bridge loan from Love Funding parent, Midland States Bank.