Advisors: Scott E. Monasch
City: Santa Cruz
State: California
Lender type: Agency
Property type: Senior Housing
Transaction type: Refinance
Loan amount: $10,940,000

Slatt Capital Principal, Scott Monasch, is pleased to present the recent loan closing on the refinance of a 68-unit low-income senior apartment project in Santa Cruz, California. The $10,940,000 loan was placed through HUD’s 223f program. The new financing retired the borrower’s bridge facility used to acquire the subject property and work through the process with the housing authority to obtain, update, and extend the low-income status of the property. The owner/borrower has extensive relationships within the city, county, and housing authority which aided in getting all required approvals. This allowed for significant increases up to current market rents, which bolstered the cash flow and value of the property.

There was also a myriad of challenges and property updates that were required during the year-plus process. The owner, lender, housing authority, consultants, and third-party management worked tirelessly and cohesively to overcome the hurdles. The result was an astounding loan of 113% of the purchase price, with significant cash-out, and a 35-year fixed-rate with a step-down prepay of 10 years, starting at 10% and declining 1% per year to zero in year 11.

Mr. Monasch used one of Slatt Capital's correspondent lender relationships to process and close the loan. Although the process can be arduous, the end result is a loan product that creates incredible value and a lifetime fixed-rate and LTV that is not available under any other loan product. Low Income is not a requirement but has value add to loan underwriting.

Principal/Board Member
Walnut Creek