By Adelina Osan, Associate Editor
Leading national provider of FHA financing Rockport Mortgage Corp. provided $17 million for the acquisition and substantial rehabilitation of an affordable housing apartment community in Knoxville.
Pinnacle Park Apartments, formerly known as Arbor Place Apartments, is a low- and moderate-income housing complex offering 200 apartment units. The complex was originally developed under the Section 236 Program in the early 1970s. By 1994, the community was preserved as affordable housing under The Low-Income Housing Preservation and Resident Homeownership Act (LIHPRHA) for a term of 50 years, and was recapitalized in 2004 using LIHTCs.
The borrower collaborated with Rockport and HUD and managed to obtain a Section 8 rent increase and approval of the creative financing structure under the Section 221(d)(4) Substantial Rehabilitation Program, in a collaboration. The $17 million financing involved a multiple-tranche debt structure and leveraging the benefits of the increased NOI made available through a new 15-year PILOT and the approved Section 8 rents.
RMC, the financier, is a privately owned commercial mortgage banking firm and one of the top lenders in the country for multifamily loan closings. RMC provides financing for affordable apartments, nursing homes, assisted living and hospitals.