The owner of All-American Gardens in Camden, NJ, reached out to LSG Lending Advisors regarding a cash out transaction for his 86-unit affordable housing project. With government-subsidized rent for those who qualify, All American Gardens offers an affordable solution to low income families and individuals.
Our Key Differentiating Factors
Despite contact from multiple brokers and lenders, the owner of All-American Gardens chose to work with LSG Lending Advisors based on several key differentiating factors:
- LSG Lending Advisors’ familiarity with the FHA, Fannie Mae, and Freddie Mac Multifamily programs.
- The ability to call, text or email any concerns with the expectation of a prompt response, seven days a week.
- LSG Lending Advisors’ availability of resources to answer any in-depth questions relating to his transaction.
Our new client had two clear goals for his transaction:
- To take equity out of the project.
- To reduce his current interest rate, that was in excess of 5%.
LSG Lending Advisors requested the items required to size the transaction, including the original and current HAP contracts, the current note and mortgage statement, financial information covering the last 3 years, the T-12 financial report, current rent roll, and occupancy history for the last 3 years.
After the lender had sized the project, LSG Lending Advisors contacted the client to go over the estimated costs and terms and to provide a timeline for the transaction. Our client decided to proceed, and signed the application.
The appraisal was delayed by approximately a week due to the coronavirus epidemic. LSG Lending Advisors worked with the owner, apartment manager, appraiser and engineer to coordinate their site visits and minimize exposure, to ensure the safety of the residents and all parties involved.
LSG Lending Advisors worked with additional third parties to obtain further information required, including a certificate of occupancy. Under normal circumstances, the City of Camden would be able to provide this document, but staff were not available at this time due to the stay-at-home order.
Our client requested a fixed term for 10 years with a 30-year amortization period. LSG Lending Advisors recommended a Fannie Mae MAH transaction that allows cash out up to 75% of the value, with a debt service coverage of 1.2x.
The transaction closed with a lower rate than was initially quoted, and 15 days earlier than projected, despite COVID-19.
Our client was very happy with our process and the end result of the transaction.