Greystone Provides $33M HUD Construction Loan for NC Apartments
Greystone has provided $33.2 million to Raleigh, N.C.-based owner and developer Dewitt Carolinas to help fund its construction of a planned 240-unit rental property called Litchford 315 in Raleigh, N.C., Commercial Observer has learned.
The U.S. Department of Housing and Urban Development (HUD) Section 221(d)(4) loan has an 85 percent loan-to-cost, indicating the cost of construction is around $39 million, and it carries a “low, fixed interest rate during the period, followed by a 40-year term with straight amortization,” according to information from Greystone. Section 221(d)(4) HUD financing is dedicated to providing longer-term, fixed-rate financing at lower pricing in order to fund for new construction or heavy rehabilitation of multifamily assets.
Greystone managing director Eric Rosenstock and vice president Jason Stein originated the mortgage on behalf of Dewitt.
“In today’s evolving financing environment, driven from uncertainty due to the novel coronavirus, many banks, balance sheet lenders and construction lenders are not quoting deals during the pandemic. Yet HUD is lending at a record pace,” Rosenstock said in a prepared statement.
In June last year, Triangle Business Journal reported that Dewitt had bought 14 acres of vacant land along Litchford Road in North Raleigh from Halteman Real Estate for just $3.5 million, with plans to erect Litchford 315. Dewiit had been eyeing the property for at least a few years. The Triangle Business Journal’s report said that Dewitt had filed an administrative site review to the city of Raleigh in 2016 that outlined plans for the site. As of last summer, the plans called for 10 buildings that will comprise the 240 units, half of which will be two-bedroom units.
Litchford 315 will feature a pool and clubhouse. Development is expected to wrap in the second quarter of 2021.
“We are thankful [for the Greystone team’s] guidance on securing HUD-insured financing for our [project] and serving as a steady hand throughout the entire process,” Todd Saieed, the CEO of Dewitt Carolinas, said in prepared remarks. “With this long-term, fixed- [and] low-rate loan, we can plan for the long-term success of this property and the value it will provide to residents.”