Case Study: Fairfield Credit Facility – Affordable Housing
Fairfield Credit Facilty
Case Study: Affordable Housing
Property Info
Property Type: Affordable Housing
Date Closed: Affordable Housing
City, State: Multiple Locations
Lender: Fannie Mae and Berkadia
Loan Amount: $175M
Property Objectives
The Fairfield Affordable Housing Preservation Fund (the “Fund”) is Fairfield’s newly launched open-end fund focused primarily on acquiring rent and income-regulated affordable housing assets in markets throughout the U.S. The Fund is Fairfield’s first affordable housing-focused investment vehicle open to third party investors and will leverage Fairfield’s 20-year history of investing and managing Low Income Housing Tax Credit (“LIHTC”) multifamily assets, which currently represents $4.1 billion of Fairfield’s $10.6 billion total assets under management. Current data as of December 31, 2022 (inclusive of regulatory assets under management of Fairfield Realty Advisors LLC).
Berkadia Solution
Credit facility executions allow borrowers to arrange flexible financing terms for a portfolio of properties on a cross-collateralized and cross-defaulted basis, with property addition, property release, property substitution, and borrow-up capabilities for all asset classes. The benefits of a credit facility include:
- Flexibility: Facility executions allow ultimate flexibility in portfolio management with opportunistic sale or release of properties and an easy addition of properties
- Certainty: Pre-negotiated loan documents provide for certainty of execution and fast closings for facility expansions as well as allow borrowers to retain favorable interest rates with property substitutions
- Credibility: Having the facility in place gives Kairos very low cost of capital, flexible terms, and significant credibility with potential sellers who will know that financing is readily available, allowing them ability to move quickly and secure new acquisition opportunities
- Efficiency: Recognize portfolio improvements efficiently with first lien borrow-ups
Client Results
By combining fixed and floating rate tranches, the facility allows for greater flexibility when it comes to interest rate management, as well as the ability to add or remove different assets to the collateral pool without incurring prepayment penalties.
Mortgage Banking
Berkadia Affordable Housing
Partnering with Berkadia Affordable Housing comes with our promise to provide clear and steady guidance from start to finish. Whether you’re looking to preserve and enhance existing affordable homes or create beautiful new properties, we look forward to partnering with you on this vital mission.
Learn more about Berkadia Affordable Housing.
CLIENT STORIES
Credit facility executions allow borrowers to arrange flexible financing terms for a portfolio of properties on a cross-collateralized and cross-defaulted basis, with property addition, property release, property substitution, and borrow-up capabilities for all asset classes. Kairos Investment Management Company and Berkadia secured a $175 million credit facility backed by Fannie Mae.
We recently partnered with Freddie Mac and Spira Equity Partners to help rehabilitate and preserve 392 units of affordable housing for the residents of Brittany Bay Apartments. Brittany Bay has the most units of any community in a High Opportunity Area that Freddie Mac has financed.
The Fairfield Affordable Housing Preservation Fund is focused on acquiring rent and income-regulated affordable housing assets in markets throughout the U.S. The Fund is Fairfield’s first affordable housing-focused investment vehicle open to third party investors and will leverage Fairfield’s 20-year history of investing and managing LIHTC multifamily assets.
A lot with a vacant commercial building that’s fallen into disuse has been transformed into new housing for Los Angeles’ homeless community by development company and Berkadia partner, Aedis Real Estate Group. Berkadia originated $50 million in Freddie Mac’s TEL forward commitments that will finance Hope at Avalon, as well as two sister projects Hope on Broadway and Hope on Hyde Park.
JASA is a longtime Berkadia client and non-profit organization committed to the safety, health, and well-being of seniors. Recently, Berkadia financed $46M+ in loans for two JASA properties under the HUD 223(f) program. In addition to repairs and upgrades, the higher leveraged, low interest rate loans enabled JASA to allocate funds to programs benefiting their residents.
RESEARCH AND INSIGHTS
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