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December 4, 2020
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Greystone Affordable Development Partners with Hamilton Valley Management to Redevelop Affordable Rental Housing in Texas


Greystone Affordable Development recently closed a $120.5 mil transaction – its first in the state of Texas – in collaboration with Burnet, TX-based Hamilton Valley Management Inc, an owner and manager of affordable multi-family housing in rural areas of Texas. Utilizing the housing industry’s critical 4 Percent Low Income Housing Tax Credit (Housing Credit), which is currently in crisis due to historically low rates, Greystone Affordable Development will redevelop, modernize and secure affordable rental homes for thousands of Texans.

“The rehabilitation of these properties, and the jobs that will be created during the extensive rehabilitation, would not be possible without the Housing Credit, our nation’s primary tool for financing affordable rental housing,” said Tanya Eastwood, President, Greystone Affordable Development. “Unfortunately, the program is facing significant challenges, threatening the development of affordable housing across the country at a time when it is needed more than ever. We support the immediate enactment of federal policies, such as the Moving Forward Act, H.R.2 and the Emergency Affordable Housing Act of 2020, which creates a minimum 4 Percent Housing Credit rate that would strengthen the purpose and efficacy of the Housing Credit and provide more affordable homes across the nation.”

Hamilton Valley’s portfolio of affordable housing properties for this transaction includes 23 aged USDA Rural Development Section 515 properties, comprising 802 apartment homes serving low-income households in 14 counties across Texas. Greystone’s affordable housing preservation group worked closely with USDA’s Rural Housing Service (RHS) Texas State Offices, as well as the Texas State Affordable Housing Corporation and Texas Department of Housing & Community Affairs to coordinate and secure the financing needed to acquire and rehabilitate this at-risk and much-needed housing.

The financing plan combined both public and private funding and included:

• Tax-Exempt Bonds – Single issuance of $35.9 mil in multifamily private activity tax-exempt bonds by Texas State Affordable Housing Corporation. The short-term bonds received an A-1+ rating from S&P Global.
• Low-Income Housing Tax Credits – Purchase of 4 Percent Housing Credits by Boston Financial Investment Management, L.P., generating $19.1 mil in capital contributions.
• RHS 515 Debt – Assumption and subordination of $19.3 mil of original USDA Section 515 debt. The Section 515 program is a direct loan program designed to provide subsidized loans to developers of affordable housing in rural markets. In addition, 94% of the 802 apartment units will continue to receive Section 521 Rental Assistance provided by RHS.
• Senior Debt – $29.5 mil in long-term debt comprised of USDA guaranteed 538 loans, provided by Greystone Servicing Company LLC.
• Other – Other funding sources included additional financial support of $16.7 mil.

With the financing in place, the rehabilitation plan includes a fast-paced construction process, estimated to be complete within 16 months, during which no residents will be permanently displaced. Substantial renovations, averaging $37.2k per unit, will include both interior and exterior improvements. Particular emphasis will be placed on bringing the properties, built between 1987 and 2003, up to modern standards, addressing accessibility, functional obsolescence and deterioration.

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