Red Capital Structures Financing for California Affordable Seniors High Rise

Red Capital Markets, LLC  and red Mortgage Capital, LLC, the investment banking and mortgage lending entities of comprehensive capital provider RED CAPITAL GROUP, LLC, recently provided a combination of bond underwriting and mortgage banking services to the substantial rehabilitation of a low-income multifamily/seniors housing property in a San Francisco neighborhood.

The transaction utilized a $33.2 million conventional/taxable GNMA-backed/Federal Housing Administration Section 221(d)(4) Substantial Rehabilitation loan, processed and funded by Red Mortgage Capital and held as collateral for a $16.7 million 2011-B Series of short-term, tax-exempt multifamily housing revenue bonds underwritten by Red Capital Markets, which will be used to “bridge” the receipt of a 4% LIHTC equity proceeds being provided by Bank of America.

Also included in the structure is $16.5 million of New Issue Bond Program proceeds, issued along with the 2011-B series by the California Housing Finance Agency.

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The 182-unit property, Woolf  House, is made up of eight studio units and 174 one-bedroom units. through a 20-year Section 8 HAP contract, all units are offered to low and moderate income seniors who earn 50% or less of area median income levels and are at least 62 years old; rents for qualifying tenants must not exceed 30% of their income level.

The project is being sponsored by TODCO Group, a community-based nonprofit institution whose mission is to maintain the South of Market neighborhood’s working class, immigrant, and elderly communities as an “integral” part of their neighborhood’s future.

“Many years ago, TODCO started work in this community advocating and providing housing for those affected by redevelopment,” said Richard Andrews, senior managing director of Red Mortgage Capital, LLC and lead banker for securing the FHA Insured Mortgage loan. “We are honored to have a role in their continuing mission by working with the HUD San Francisco office to secure this non-recourse financing.”

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The project’s renovations are expected to be completed by or before July 2013.

Written by Alyssa Gerace

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