Beech Street Capital provides $14.8 million Fannie Mae loan to refinance two apartment buildings

Beech Street Capital, LLC has provided a $14.8 million Fannie Mae loan to refinance two apartment buildings. Located in the neighborhood of Hamilton Heights, the apartments are operated under a Section 8 Housing Assistance Payment (HAP) contract. Beech Street is a Fannie Mae DUS lender, a Freddie Mac Program Plus Seller Servicer, and an FHA Multifamily Accelerated Processing (MAP) and LEAN lender. The transaction was originated by Joe Klein of Meridian Capital Group, LLC, and was financed by Beech Street Capital as part of its correspondent relationship with Meridian. "The borrower's goals were to achieve permanent nonrecourse financing and to maximize refinancing proceeds," said Matt Legge, senior vice president of credit at Beech Street. "We squarely met these goals while executing more quickly than our competition for this loan." The properties are well maintained, located close to public transportation, and have high occupancy rates. Over the last three years the operator made capital improvements to the 89-unit property equivalent to $6,000 per unit. In 2010, with a grant through the Low-Income Home Energy Assistance Act, the operator has embarked on a comprehensive weatherization program that is expected to yield annual savings of $700 per unit when it is completed in 2015. The HAP contract plays a role in high occupancy. Under the HAP program, tenants pay rent equal to one-third of their income while HUD subsidizes the balance. As a result of the HAP contract, the properties have had economic occupancy rates of over 97% for the last two years. The fixed-rate loan has a 10-year term, with 9.5-year yield maintenance, partial interest-only payments, and 30-year amortization thereafter, payable on an actual/360 basis.