Love Funding, one of the nation’s leading providers of FHA multifamily, affordable and healthcare financing, announced the closing of a $7.49 million loan to convert the landmark Union Arcade commercial building in downtown Davenport, Iowa, to a mixed-use, market-rate multifamily residential and retail space.
Senior Director Harry Cheatham of Love Funding’s St. Louis office secured the loan through the U.S. Department of Housing and Urban Development (HUD) Section 221(d)(4) insurance program for substantial rehabilitation and construction loans. Using the program enabled the building’s owner, Financial District Properties, to obtain low-rate, non-recourse financing during construction followed by a 40-year term.
The lower level of the Union Arcade was built in 1915 to house the Union Savings Bank and Trust, while the upper level was built in 1924. The property has been awarded federal and state historic tax credits, and will benefit from a 10-year tax abatement that will guarantee the property owners savings of more than $100,000 each year. Once renovation is complete, Union Arcade will offer 68 rental units along with 8,100 square feet of commercial space.
The historic building’s renovation will contribute to a revitalization of downtown Davenport. Financial District Properties, which bought the building in 2012, is also investing $10 million to create 29 apartments in Davenport’s Wells Fargo building, among other projects in the city.
“HUD is committed to helping preserve historic properties such as the Union Arcade building,” Cheatham said. “The agency’s loan insurance programs are an economical way for local planners and developers to revitalize urban areas while maintaining their historic legacies.”