Love Funding, one of the nation’s leading providers of FHA multifamily and healthcare financing, announced the closing of a $17.5 million loan for Broadway Townhomes, a 175-unit townhouse community in Camden, New Jersey, that is the first moderate rehabilitation project approved under a new national program to preserve affordable housing.
The transaction, which was secured by Love Funding Senior Director Leonard A. Lucas of the Boston office, is the first of its kind to be approved under the U.S. Department of Housing and Urban Development’s Rental Assistance Demonstration (RAD) program. The program allows proven financing tools to be applied to preserve and upgrade at-risk public and assisted housing, and provides for a long-term Section 8 rental assistance contract. Before the transaction, the project’s Section 8 contract was renewed on a year-to-year basis.
Broadway Townhomes will be renovated using tax-exempt bonds provided by the New Jersey Housing and Mortgage Finance Agency, in combination with 4 percent low-income housing tax credits and the proceeds from the loan, which is being insured through HUD’s 221(d)(4) program. Each unit in the project, which spans 10 square blocks in Camden, is being rebuilt in a gut renovation that will cost more than $100,000 per unit.
“A renovation of this magnitude wouldn’t have been possible without the RAD program,” said Israel Roizman, President of Roizman Development, the project’s owner. “We needed a long-term Section 8 contract in place to be able to borrow enough money to take this on, so the program was a perfect fit for us. It was an incredibly complex transaction and we sincerely appreciate Love Funding’s tenacity in pushing it through.”
HUD introduced the RAD program last year to help public housing authorities preserve affordable housing units in the midst of acute budgetary pressures. One often overlooked component of the program allows privately owned affordable housing projects to apply for moderate rehabilitation contracts. The component was included because an existing moderate rehabilitation program at HUD was being phased out, which would have privately owned projects without any subsidy and therefore put them at risk of leaving the affordable housing stock.
For more information, contact Leonard Lucas at (617) 638-0055.