Through one of the first of Fannie Mae’s new ARM 7-6 loans, Red Mortgage Capital has secured $5.62 million in financing for a Colorado memory care facility.
The non-recourse financing, which has been made available by Fannie Mae earlier this year, was provided to Balfour Senior Living to refinance its Balfour Cherrywood Village Memory Care facility, based in Louisville, Colo. The 46-unit (52-bed) facility was built in 1999 and will utilize the rate flexibility of the Mannie Mae 7-6 ARM with an initial variable rate that is typically lower than the prevailing fixed rate.
“We are pleased to have completed this financing with Red Mortgage Capital and believe the flexibility to convert to a fixed rate option is very appealing,” Michael Schonbrun, founder and CEO of Balfour Senior Living, which owns the facility.
The Fannie Mae 7-6 product launched this year and offers reasonable prepayment penalties, giving borrowers the option of converting to a fixed-rate product if they decide to lock in long-term financing. Available for up to 80% loan-to-value on 7- or 10-year terms, the product has yet to gain traction as a bridge loan, but is seen as having the potential to serve as an alternative to waiting through HUD’s backlog.
The transaction marks the first Fannie Mae deal for Balfour, noted Jeffrey Ringwald, lead banker from Red Mortgage Capital’s Senior Housing Group.
Written by Elizabeth Ecker