Freddie Mac Backs $22M Loan in Washington State, Its First on Indigenous Land
By Matt Grossman September 21, 2018 2:36 pmreprints
Indianapolis-based TWG Development has sealed a $22 million Freddie Mac loan to build a multifamily complex on the tribal land of the Kalispel Indians near Usk, Wash., marking the government-sponsored entity’s first financing on indigenous land, Freddie Mac announced.
The 10-year loan from KeyBank Real Estate Capital, with a 30-year amortization, was underwritten at a loan-to-value ratio of 80 percent, implying a $27.5 million project valuation. The deal includes a forward interest-rate lock that will eventually allow TWG to secure a permanent loan at a predetermined cost when construction is finished.
TWG will ground lease the 10-and-a-half-acre development site from the Kalispel tribe and build six apartment buildings totaling 216 units, with 20 percent of the apartments reserved for low-income residents, a Freddie Mac spokesman said. The development, which will comprise a mix of one-, two- and three-bedroom apartments, is called Salish Flats, after Salish, an language historically spoken by Kalispel people.
“KeyBank is very proud to work with Freddie Mac on our first workforce housing multifamily project on Native American tribal land,” KeyBank’s Jeff Rodman said in a statement. “This additional housing will continue to help the Kalispel Indian tribe accomplish its goal of providing quality and safe housing for its families.”
The Kalispel, also known as the Pend d’Oreilles, currently number fewer than 500 members, according to the tribe’s website. About 150 live on the reservation, near rural northern Washington’s border with Idaho, where the tribe is currently developing a new $10.5 million casino. Another 150-or-so Kalispel people live 50 miles south in Spokane, Wash.
“This is an exciting project for us,” said Shaun Smith, a senior director at Freddie Mac, said in prepared remarks. “Salish Flats shows our breadth and reach—and the ways we’re branching out to serve every corner of the market.”
The other big government-sponsored housing finance agency, Fannie Mae, has long supported housing for indigenous Americans through its Native American conventional-lending initiative. The program backs mortgages made by specially approved lenders on tribal land with assurances from the tribe that ordinances regarding foreclosures, resales and evictions will be enforced.
Representatives from TWG did not immediately respond to an email inquiry. No one responded right away to a voicemail left with the Kalispel tribe’s administrative office.