Ravello Holdings Gets $56M Loan for LA Affordable Housing Development
Ravello Holdings has secured $55.6 million in construction financing for an affordable housing development called Maison’s Palmdale in Los Angeles County.
Merchants Capital provided a $31.6 million loan through Merchants Bank of Indiana and $24 million in permanent financing from a 4 percent Low Income Housing Tax Credit (LIHTC), Fannie Mae forward commitment and permanent loan. Merchants Capital is a subsidiary of the bank that shares its name.
Marsha Goff, executive vice president of Merchants Capital, told Commercial Observer that Ravello Holdings, based in L.A.’s Sawtelle neighborhood, and Beverly Hills-based Ascenda Capital are the project’s two developers, with WNC & Associates serving as the LIHTC investor for the project. In total, the project will create 167,296 square feet of affordable housing at 6510 Neil Drive in the city of Palmdale, Calif.
“[We’re] excited to be able to provide affordable housing with the single-family or detached townhomes, as we call that structure,” Goff said.
Construction of the property started last month and is expected to wrap up by the end of next year, according to a representative for Merchants Capital. The proceeds from the permanent loan will refinance the construction loan, according to Stifel’s Gary Brandt. Stifel is the bond underwriter for the project.
The property is the first in the state to be developed under new legislation that allows for greater lot size density, according to Merchants Capital. The law allowed the number of units on the property to increase from 59 to 118, Goff said.
“You basically are able to double the density,” Goff said. “Then, obviously, it makes that transaction more feasible, too. To do 59 units, it’s not as feasible as [doing] 118.”
The development includes 118 single-story units ranging from two to three bedrooms. About 36 units are restricted to residents earning no more than 50 percent of the area median income, which was $62,865 from 2015 to 2019, according to the United States Census Bureau. Another 81 units are restricted to residents earning no greater than 60 percent of the AMI.
Ravello and Ascenda did not immediately respond to a request for comment.
Celia Young can be reached at firstname.lastname@example.org.