Vintage Realty Company

40-year fixed rate under 6.00% for hud-insured loan for start-up project

On July 31, 2007, Sims Mortgage Funding, Inc., our mortgage banking subsidiary, closed a $23,008,400 HUD-insured loan for Vintage Realty Company for the construction of a 256-unit apartment complex. The loan was insured under the Section 221(d)(4) program and was funded through the sale of Government National Mortgage Association (GNMA) mortgage-backed securities. The taxable securities have a 40-year fully amortizing term and a fixed rate of interest at 5.99%.

background

Vintage, based in Shreveport, Louisiana, is a regional, full-service real estate company that develops and operates multifamily housing project and manages commercial office and retail space for third-party owners. Vintage owns and manages over 2,000 multifamily units.

challenge

After HUD issued its Firm Commitment for mortgage insurance and Vintage formally acquired the site, the general contractor, who had been approved as part of the underwriting, had to withdraw from the project. Vintage was forced to locate a new contractor that, in turn, had to familiarize itself with the plans and specifications and to develop its guaranteed maximum price in a limited amount of time before the Firm Commitment would expire.

implementation

Sims prepared a revised underwriting and financial analysis of the transaction based on the new general contractor and its revised construction budget; the new analysis was accepted by HUD, who approved the new general contractor on an expedited basis.

result

Sims’ ability to effectively interact with HUD after it initially approved the transaction resulted in the timely issuance of a revised Firm Commitment and approval of a new contractor. In turn, Vintage was able to close its loan on a timely basis before the commitment would have expired.