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Debt & Equity

Lending first as Walker & Dunlop closes new loan

Walker & Dunlop, Inc. has closed the first Freddie Mac Tax Exempt Loan in the country.

The company announced three loans totaling $10,665,000 for properties in Tennessee with Freeman Webb using the new loan program.

The program requires less documentation (no offering statement, reimbursement agreement or credit enhancement agreement) and fewer participants (no investment banker or rating agency), reducing the cost of issuance by up to 40 percent.

The total process for the transaction typically takes 90 days from signed application to closing.

Managing directors Keith Melton and David Strange and senior vice president Frank Baldasare led the Walker & Dunlop team.

“Having had the opportunity to close the first Freddie Mac Tax Exempt Loan in the country, Walker & Dunlop was able to provide Freeman Webb clear direction in structuring a new, efficient and cost effective way of utilizing tax-exempt bond credit enhancement with four percent  Low-Income Housing Tax Credits (LIHTC). This resulted in well leveraged, long-term, low cost of debt financing,” commented Keith Melton.

“We are excited that through our partnership with Freddie Mac, Walker & Dunlop is able to provide this tax exempt financing option to affordable housing developers for both existing and new construction through their immediate delivery and unfunded forward executions,” said Frank Baldasare.

Freeman Webb is a private real estate investment firm that specializes in the acquisition, management and renovation of multifamily residential and commercial property.

The Tennesee portfolio included three properties with loans structured as 16-year terms, with 35-year amortization schedules, with minimum debt coverage ratio of 1.15x, and an average loan to value of 90%.

Freeman Webb had a strong desire to take advantage of the historically low interest rates as well as utilizing a more streamlined execution.

The Freeman Webb investment and management portfolio includes 80 multifamily properties, with 15,000 units across the Southeast, and office and retail properties in the Southeast and Midwest.

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