Property Type:
Section 202 Senior Housing
Location:
Spotswood, NJ
Objective:
Refinance/Renovation
Financing Amount:
$5.3 million
Sources of Funding:
Taxable, fixed-rate bonds insured by the FHA Sec. 223(f) program
Closing Date:
Feb. 15, 2007

Background & Goals
Strong management and regular maintenance at Woodmere Senior Housing had kept its 126 affordable senior apartments comfortable for 26 years, but the property had identified several renovation projects to update the units and improve energy efficiency.

Metal-framed windows conducted cold winter air into the apartments, and expansion and contraction ruptured the windows’ seals. Kitchen renovations, parking lot repairs and other changes also were deemed important to the future of the property.

Yet Woodmere Senior Housing lacked the capital to complete these projects. Its replacement reserve of approximately $400,000 was adequate for routine maintenance, but not for such major goals.

Sources of Funding & Outcome
Lancaster Pollard structured and underwrote a $5.3 million refinance that funds $855,765 in immediate repairs and boosts Woodmere Senior Housing’s replacement reserve to more than $600,000. A developer fee of $128,365 will be paid to the property.  The 30-year, fixed-rate, low-interest loan is backed by federal mortgage insurance through the FHA Sec. 223(f) program.

Woodmere residents will receive completely upgraded kitchens, new common area flooring, a new fire alarm system and parking lot repairs, among other changes. New windows will be more energy-efficient, easier for elderly residents to open, and self-cleaning.

Lancaster Pollard is the nation’s leading underwriter of Sec. 202 refinance loans. In fiscal year 2006, according to HUD data, the firm refinanced more Section 202 direct loan dollars than any other lender in the country.