Love Funding is pLeased to announce the Loan cLosing For:
Fox Ridge Apartments
FHA 223(a)(7) Refinance
First Vice President
2000 S. Emerson St.
Denver, CO 80210
Peter Wessel closed a $26.1 million refinance loan for Fox Ridge Apartments, a
328-unit apartment complex in Longmont, CO. He secured the loan through the
U.S. Department of Housing and Urban Development’s 223(a)(7) loan program.
Utilizing the HUD mortgage insurance enabled Wessel to lock in a 40-year
non-recourse loan with a low, fixed interest rate, improving the property owner’s
cash flow by more than $350,000 a year.
Borrowing rates near historic lows are allowing multifamily property owners to
improve their cash positions through refinancing, even in the face of significant
prepayment penalties. The Fox Ridge mortgage that was paid off, which Wessel
originated in 2001, was encumbered by a 5 percent prepayment penalty if paid off
in full this year. With a slight adjustment in the interest rate, Love Funding was able
to turn to its established network of investors and place the loan at a premium in
the secondary market, using the proceeds to pay the prepayment penalty on behalf
of the borrower without adding to the loan balance.
“A lot of borrowers think they need to absorb the hit of a prepayment penalty or
just wait it out, and they end up losing out on significant savings,” said Wessel.
“They don’t realize that skilled lenders are out there who have the ability to manage
their way through such obstacles.”
The Fox Ridge transaction was also one of the first 223(a)(7) transactions that
HUD outsourced to its Office of Affordable Housing Preservation (OAHP), which
reduced the loan’s processing time to less than six months from engagement to
closing. HUD is engineering a number of changes to manage the longer processing
times that have resulted from a surge of interest in its mortgage insurance programs
in the past year.
OTHER RECENT LOAN CLOSINGS BY LOVE FUNDING INCLUDE:
$31,860,000 New Construction $7,200,000 Refinance Loan
Chatsworth at Wellington Green Emerald Park Retirement Center
FHA 232 Loan Program HUD 232/223(a)(7) Loan Program
Wellington, FL Hollywood, FL
$10,540,700 Refinance Loan $3,745,000 Refinance Loan
Schooner Estates Londontown Apartments
Retirement Community FHA 232/223(a)(7) Loan Program
FHA 232/223(a)(7) LEAN Knoxville, TN