Community Preservation Partners and Hampstead Development Partners turned to KeyBank to secure capital to acquire and renovate an affordable senior apartment community in New Haven, Connecticut. Originally built in 1973, the Section 8 community consists of 121 units, split between 106 one-bedroom and 15 two-bedroom units. Plus, there is one ground-level retail bay, which includes a KeyBank branch, in the nine-story building. Going forward, the property will have a Housing Assistance Payments (HAP) Contract covering 112 units for 20 years, and the other nine units will also operate as tax-credit units.
KeyBank Community Development Lending and Investment (CDLI) and KeyBank Real Estate Capital’s (KBREC’s) Commercial Mortgage Group worked together to arrange $12.5 million of low-income housing tax credit (LIHTC) equity, a $6 million equity bridge loan, an approximate $19 million public bond offering and $19 million of Fannie Mae tax-exempt bond collateral. The New Haven Housing Authority issued the tax-exempt bonds.
The property will remain encumbered by the HAP use agreement, a new bond regulatory agreement requiring 40% of the units to be restricted to 60% of the area median income (AMI), and a new LIHTC Land Use Restrictive Agreement from the Connecticut Housing Finance Authority restricting 96 units to 60% AMI and 25 units to 50% AMI. Jonathan Wittkopf of KeyBank’s CDLI team, Robbie Lynn of KBREC’s CMG team, and Victoria O’Brien and John-Paul Vachon of Key Community Development Corporation structured the financing. Sam Adams of KeyBanc Capital Markets’ Public Finance Group served as the bond underwriter. It takes a team to put together such a complicated structure.
