Transaction Overview
GSP Successfully placed the $3,250,000, refinance for a 68-unit affordable housing community. The property is age and income restricted. All units are one bedroom, one bath. The loan is fixed for 30 years at 5.0%, has a 30-year term, and amortizes over 30 years.
Challenge: The affordability component is supported by a recorded 2nd trust deed that is almost three times the senior loan. Although the 2nd lien holder agreed to re-subordinate to new debt, this recordation prohibited most underwriters from reviewing the file. The Borrower is interest rate risk adverse and refused to accept any rate reset or balloon exposure.
Solution: GSP identified a DUS underwriter who agreed to obtain the required waivers for the recorded 2nd trust deed given the affordability component and the below market rents. The Borrower experience in this market and segment further solidified the credit file.
