Lument has announced the closing of a $117.4 million Freddie Mac unfunded forward loan for Hope Gardens, a portfolio of affordable housing communities in Brooklyn, New York. The Freddie Mac loan features a three-year rate lock and serves as construction take-out financing, covering 949 units across 47 buildings. The transaction was led by Lument’s Josh Reiss, director on the affordable housing production team.
“Helping preserve and enhance an important source of affordable housing like Hope Gardens is one of
the highlights of this profession,” said Reiss. “The closing allows the client to complete the substantial
rehabilitation of the properties with lower cost, short-term financing and then close into permanent
financing with the Freddie Mac tax-exempt loan, which offers the benefits of long-term, fixed-rate
debt.”
The Freddie Mac loan features a low, fixed interest rate, 30-year term, and 40-year amortization.
Located in Brooklyn’s Bushwick neighborhood, Hope Gardens consists of 60 scattered-site multifamily
properties in close proximity to one community center building. Built from 1980 to 1987, the portfolio
contains 1,321 total units in garden-style, mid-rise, and high-rise buildings ranging from three to 14
stories tall. All the units are subsidized by long-term Section 8 contracts. In addition to the residential
units, the community features a daycare and two senior centers.
The sponsor is a joint venture between Pennrose Holdings, Acacia Real Estate Development, and an
affiliate of The New York City Housing Authority (NYCHA). In addition to the Freddie Mac loan, other
funding sources that were part of the transaction included low-income housing tax credit (LIHTC) equity,
a seller note, and a deferred developer fee.
The closing marks the first of two financings for Hope Gardens between Lument and the sponsor, as a
second portfolio is scheduled to close in late July. In aggregate, Hope Gardens will carry approximately
$190 million of Freddie Mac permanent financing once the second transaction is completed.
