Joint Venture Secures $117M Freddie Mac Loan for Affordable Community in Brooklyn
A joint venture between Pennrose Holdings, Acacia Real Estate Development and an affiliate of the New York City Housing Authority (NYCHA) has landed a $117.4 million Freddie Mac unfunded forward loan for Hope Gardens, a portfolio of affordable housing communities in Brooklyn’s Bushwick neighborhood, Commercial Observer has learned.
The 30-year Freddie Mac loan acts as construction takeout financing. While the interest rate wasn’t disclosed, a release describes it as ”low” and “fixed.” The capital stack also includes low-income housing tax credit (LIHTC) equity as well as seller financing and a deferred developer fee — paid out when the project reaches cash-flow stabilization.
Lument arranged the financing with a team led by Josh Reiss.
Hope Gardens, erected in the 1980s, comprises 1,321 units across 60 multifamily buildings — all subsidized by the Section 8 housing program. The buildings surround a community center, which includes both day care and senior centers, per a release.
“Helping preserve and enhance an important source of affordable housing like Hope Gardens is one of the highlights of this profession,” said Reiss. “The closing allows the client to complete the substantial rehabilitation of the properties with lower-cost, short-term financing and then close into permanent financing with the Freddie Mac tax-exempt loan, which offers the benefits of long-term, fixed-rate debt.”
“The closing marks the first of two financings for Hope Gardens between Lument and the sponsor, as a second portfolio is scheduled to close in late July. In aggregate, Hope Gardens will carry approximately $190 million of Freddie Mac permanent financing once the second transaction is completed,” according to the release.
Pennrose Holdings, Acacia Real Estate Development and NYCHA did not immediately respond to requests for comment.
Update: This story originally misattributed source material. This has been corrected. We apologize for the error.
Emily Fu can be reached at efu@commercialobserver.com.
