HUNT MORTGAGE GROUP FATHER PINTO - NH&RA MORTGAGE GROUP FATHER PINTO: RAD CASE STUDY NH&RA Property...
Transcript of HUNT MORTGAGE GROUP FATHER PINTO - NH&RA MORTGAGE GROUP FATHER PINTO: RAD CASE STUDY NH&RA Property...
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H U N T M O R T G A G E G R O U P
FATHER PINTO: RAD CASE STUDY
NH&RA Property & Portfolio Recapitalization Symposium
February 22, 2017
Joshua ReissVice [email protected]
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F A T H E R P I N T O : R A D C O N V E R S I O N
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113 unitsBuilt in 1976Seniors Public HousingEl Paso, TX
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F A T H E R P I N T O : S & U D A T E D 1 / 2 9 / 1 6
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Rehab Costs of ~$44k /unit
SOURCES:Hunt- Freddie TEL 4,566,000$ LIHTC Equity 3,993,000$ Acquisition 2,260,000$ Federal Home Loan 500,000$ Housing Authority Contribution 1,029,304$ Total Development Sources 12,348,304$
USES:Acquisition Costs 2,260,000$ Total Construction Costs 6,249,939$ Fees and Soft Costs 3,838,365$ Total Development Costs 12,348,304$
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T O T A L C O N S T R U C T I O N C O S T S G R E W …
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Construction Costs:Residential Rehab 5,040,274$ General Requirements --- 6% 302,416$ Builder's Overhead --- 2% 100,805$ Builder's Profit --- 6% 302,416$ Owner Controlled GMP Contractor Contingency 252,014$ Owner Contingency 252,014$
Total Construction Costs 6,249,939$
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T O T A L C O N S T R U C T I O N C O S T S G R E W …
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Construction Costs:Residential Rehab 6,514,076$ Contractors Contingency 325,704$ General Conditions 378,595$ Contractors Overhead 123,043$ Construction Fee (Profit) 347,045$ Owner Contingency within GMP 325,704$ Owner Contingency outside GMP 325,704$ Hoist + hoist contingency 326,913$ Total Construction Costs 8,666,784$
Costs increased due to HVAC replacement and asbestos abatement.
A 39% Increase in Total Construction Costs, Residential Rehab Costs of ~$57k /unit
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W H A T I S A P H A T O D O?
§ Bond allocation set to expire on December 8th.§ Not enough time for a 221d4 loan to cover the additional development costs.
§ HACEP has multiple RAD conversions occurring simultaneously and an additional 3,000 units in its portfolio to be converted. § The multiple projects imposed strain on HACEP’s balance sheet and liquidity.
§ A forward funding would have increased the permanent loan’s interest rate by ~40-50bps.§ HACEP is depending on the free cash flow generated by the properties in it’s portfolio to fund ongoing operations post-RAD.
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L I H T C S O N L Y G O S O F A R …
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LIHTC Equity increased in line
with Total Development
Costs
SOURCES:Hunt- Freddie TEL 4,566,000$ LIHTC Equity 5,537,062$ Acquisition (Including Land Lease) 1,520,000$ Deferred Developer Fee 475,683$ Housing Authority Contribution 1,685,792$ Total Development Sources 13,784,537$
USES:Acquisition Costs 1,520,000$ Total Construction Costs 8,666,784$ Fees and Soft Costs 4,231,753$ Total Development Costs 14,418,537$
GAP 634,000$
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E N T E R F R E D D I E M A C ’ S G R E E N A D V A N T A G E
§ HACEP’s scope of work included significant energy upgrades anticipated to result in meaningful expense savings.
§ Freddie Mac launched the Green Advantage programs in the summer of 2016.
§ Freddie’s Green Plus Program allows a Seller Servicer to underwrite up to 50% of the future utility savings on an immediate funding transaction.
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F R E D D I E M A C F I L L S T H E G A P
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SOURCES:Hunt- Freddie Green Up TEL 5,200,000$ LIHTC Equity 5,537,062$ Acquisition (Including Land Lease) 1,520,000$ Deferred Developer Fee 475,683$ Housing Authority Contribution 1,685,792$ Total Development Sources 14,418,537$
USES:Acquisition Costs 1,520,000$ Total Construction Costs 8,666,784$ Fees and Soft Costs 4,231,753$ Total Development Costs 14,418,537$
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F R E D D I E M A C G R E E N U P P R O G R A M P R O C E S S
§ Seller Servicer orders a Green Assessment Report, a straight-forward property analysis to show borrowers how they can save energy or water by making property improvements.
§ Freddie Mac will reimburse up to $3,500 of the cost of the report when the borrower closes a loan with Freddie Mac.
§ Borrowers must commit to making improvements based on the Green Assessment and are able to save 15% in energy or water.
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F A T H E R P I N T O C A S E S T U D Y
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Joshua Reiss | Vice President Phone: 212.317.5747 | Cell: 201.951.0542 230 Park Avenue, 19th Floor | New York, NY | 10169 Hunt Mortgage Group | [email protected] www.huntmortgagegroup.com