Attorneys in Ballard Spahr’s Housing Group represented Walker & Dunlop in a $14.28 million transaction for The Lakewoods in Dayton, Ohio, the first loan closed under Freddie Mac’s new Direct Purchase of Tax-Exempt Loans initiative. Walker & Dunlop, a Freddie Mac seller/servicer, originated the 16-year, fixed-rate loan, for the 417-unit senior-restricted affordable housing apartment building for the Millennia Housing Development Ltd.
The Lakewoods, which has provided affordable housing for nearly a half-century, is one of only 12 properties to receive a HUD award last year for the Senior Preservation Rental Assistance Contracts (SPRAC) Program. Without the new tax-exempt loan and SPRAC programs, Millennia’s market rate options for new financing could have resulted in displacement of the low- and very low-income seniors who live at The Lakewoods, where nearly 95 percent of the units receive SPRAC subsidies.
The loan for The Lakewoods had been underwritten when Freddie Mac announced its Direct Purchase of Tax-Exempt Loans initiative in April 2014, but the Walker & Dunlop team recognized that it was a prime candidate for this new program.
The Ballard Spahr team, led by Washington, D.C.-based partner James P. Cooke, worked alongside Walker & Dunlop and Millennia to close the loan. Said Mr. Cooke: “This was a remarkable achievement given rigid SPRAC deadlines, other time pressures, and working with a new Freddie Mac program.”
The goal of the Freddie Mac initiative is to maintain the affordability of rental housing for lower-income families while increasing cost-effective financing for tax-exempt multifamily properties. The program also can lower a borrower’s issuance costs and ongoing cost of capital significantly, and simplify the closing process.
In addition to representing Walker & Dunlop in the financing transaction, partner Jeffrey S. Ballard led the firm in assisting Freddie Mac with the development of all the loan and real estate documentation for the new tax-exempt loan program.
Ballard Spahr's Housing Group is nationally recognized for its leadership in the development and financing of housing, community development, energy, public/private partnerships, and transportation projects. The firm represents state and local housing finance agencies, housing authorities, developers, mortgage and investment bankers, commercial lenders, and investors in tax credit programs in housing and community development transactions. The firm also advises clients on the programs and requirements of federal agencies related to housing, energy, and transportation, including HUD, DOT, DOE, FHA, Fannie Mae, Freddie Mac, and GNMA.