(Editor’s Note: Aberdeen Capital previously announced the firm is partnering with the Salem Housing Authority to preserve the apartment complex.)
BWE, a national commercial and multifamily mortgage banking company, announced today that it has secured a $21,800,000 bridge loan to acquire and preserve Orchard Park Apartments, an affordable housing complex in Salem, Oregon. The transaction was executed using BWE’s new Bridge Loan to Bond Purchase product.
Jim Gillespie, Executive Vice President and Director of the BWE Direct Bond Purchase Program, along with Ilya Weinstein, Vice President, both in BWE’s New York City office, arranged the financing for this first-of-its-kind transaction on behalf of a real estate investment and operating company focused on socially impactful investments like affordable housing. The loan, which closed less than 70 days after application, has a five-year term with a competitive fixed interest rate and three years of interest-only payments.
The new Bridge Loan to Bond Purchase product allows developers to acquire and preserve affordable housing properties that will be recapitalized with 4% LIHTCs and tax-exempt bonds. The bridge loan term is up to five years, which gives buyers the opportunity to secure all sources of capital, and the interest rate can be variable or fixed. A major advantage of the product is that the facility can be prepaid at any time, without penalty, if the 4% LIHTC bond transaction is financed via a BWE Bond Purchase execution.
“Competition for tax-exempt bonds is fierce in many states, so we launched this new bridge loan product to give borrowers peace of mind on obtaining tax-exempt financing even if they need to wait two or three award cycles before securing a bond,” said Gillespie. “Previously, developers would have to weigh the length of time to get bond cap with a shorter bridge term. This new product from BWE will ensure that developers have the capital they need to preserve much-needed affordable housing across the country.”
Constructed in 1994, Orchard Park Apartments is a 224-unit affordable multifamily housing property located in Salem’s Northgate neighborhood. Community residents enjoy many amenities, including a business center, parking garage, clubhouse, pool, fitness center, and playground. Apartment amenities include in-unit washer/dryer, refrigerator, dishwasher, patio/balcony, large closets, and more.
“Orchard Park is a perfect example of how this new product can be utilized to preserve affordable housing,” said Weinstein. “We’re proud to work with our longtime partners at Enterprise to bring the project’s sponsor and general partner different pieces of the capital stack so they could acquire and preserve this community.”Prior to 2022, Orchard Park’s units were income-restricted to residents earning up to 60% of the area median income (AMI), and today they are restricted to people earning up to 80% AMI. Upon the re-syndication of the 4% LIHTCs, the unit restrictions will revert to 60% AMI to better preserve the building’s long-term affordability. Enterprise Community Partners’ Real Estate Equity team also invested in the property through its Preservation Fund.
BWE provides flexible financing solutions for clients covering the entire spectrum of commercial and multifamily real estate.
BWE is a national, full-service commercial and multifamily mortgage banking company. Partnering with Enterprise Community Partners, Inc., BWE has production offices across the country and an integrated servicing platform based in Cleveland. With local market expertise, national lending relationships and financing structure experience, we provide clients with competitive, creative solutions for their financing needs. BWE provides loans for a range of institutional investors including life insurance companies, pension funds, commercial banks and CMBS lenders and is a Fannie Mae Delegated Underwriting and Servicing (DUS®) lender, Freddie Mac Optigo™ seller/servicer for Conventional and Targeted Affordable Housing Loans, Federal Housing Administration (FHA) approved Multifamily Accelerated Processing (MAP) lender and U.S. Department of Agriculture (USDA) Section 538 Rural Development lender.