Keeping It Affordable in Austin
July 18, 2017
Finding an affordable home in the third fastest-growing metropolitan area can feel impossible — but making home possible is our mission. And thanks to an innovative partnership with a Seller/Servicer and nonprofit, we’re one step closer to keeping affordable housing within reach in Austin, Texas.
Partners with a Shared Mission
The Bridge at Sterling Village deal will help preserve one of the few affordable multifamily buildings left in Austin, where rents continue to rise despite lots of new construction. This partnership involves Bellwether Real Estate Capital LLC and is sponsored by the Austin Affordable Housing Corporation (AAHC), a nonprofit subsidiary of The Housing Authority of the City of Austin (HACA) – one of the oldest public housing authorities in the country.
All the 206 units in the complex are restricted to those making no more than 60 percent of the area median income (AMI). In addition, 92 percent of the units (189) are set aside for 50 percent of AMI, making them affordable to very low-income (VLI) tenants. Freddie Mac provides preferred pricing for deals with large amounts of VLI units – and this property falls into that category.
The Sterling Village deal is a fixed-rate, capital markets execution transaction with a cash out refinance of $253,000 used for immediate capital improvements.
Ron Kowal, vice president of Real Estate Development at HACA, expressed his gratitude about the deal, emphasizing it “will ensure that the immediate property needs are met and that this property will continue to aid an underserved affordable housing population in perpetuity.”
Freddie Mac index locked the transaction to take rising interest rate risk off the table, saving Bellwether and AAHC money. On top of that, the nonprofit ownership structure meant the Borrower received a tax exemption.
Thanks to this innovative financing, Sterling Village’s one and two bedroom units with modern kitchen designs, a fireplace, private balcony or patio, walk-in closets and in-unit washer/dryers will be available at an affordable rate. Amenities will also include a swimming pool, business center, recycling facility and gated entrance.
This is just a small example of the work Freddie Mac is doing to preserve affordable housing throughout the nation.