Paramount equity mortgage

GMAC Commercial Holding Corp. announced the $18,255,000 debt financing and $9,000,000 low income housing tax credit equity investment in Belmont Villas Apartments, a 164 unit property located in Babylon, N.Y. and being developed by Jopal Enterprises.

Five GMACCH business units or subsidiaries were involved in providing investment banking services, equity, bridge, construction and permanent financing for Belmont Villas Apartments. The transaction was processed under the OneSource program where GMACCH provides multiple sources of capital on a single transaction.

Vice President David Fishier of the GMAC Commercial Mortgage (GMACCM) New York loan origination office sourced the transaction.

Mark Sween of GMACCM's affiliate, Paramount Financial Group, Inc. led the effort to provide approximately $9 million of low income housing tax credit equity. Bryan Barker and Barry Krinsky of GMACCM's Affordable Housing Division (AHD) arranged the Fannie Mae credit enhancement of $18,255,000 in variable rate tax-exempt bonds, which were underwritten and remarketed by GMAC Commercial Holding Capital Markets Corp. (GMACCH Capital Markets Corp.) and issued by the Suffolk County Industrial Development Authority. Michael Sears of GMACCH Capital Market Corp.'s New York and Washington, D.C. office acted as the investment banker.

Because AHD and Fannie Mae are permanent lenders and do not take on construction and lease-up risk, GMACCM's Construction Lending Division, lead by Senior Vice President Peter Kisluk, provided a guaranty back to Fannie Mae until the property is completed and stabilized.

In addition to providing tax credit equity, Paramount Financial Group also provided a $2 million bridge loan which was needed to round out the sources of funds. All 164 units will contain two bedrooms, will be set-aside for senior residents over the age of 56 and will be rent- and income-restricted to tenants earning no more than 60 percent of area median income. The Belmont Villas Apartments will help to ease the tremendous demand for affordable housing on Long Island.

The project took several years to come together and had a number of starts and stops. However, the Suffolk County Industrial Development Authority, along with its bond counsel, Nixon Peabody, and consultant, The Long Island Housing Partnership, worked hand-in-hand with the borrower, Belmont Villas, LLC, and the financing team to bring this important project to fruition.

According to David Fishier "The OneSource program enabled the borrower to come to one place for all of their financing needs. As tax-exempt bond and tax credit projects are complicated transactions, having a unified source of funding for both debt and equity really helps to simplify the process."