Bellwether Enterprise Closes $31.5M Affordable Housing Deal In Hurricane Katrina Ravaged Area
NEW ORLEANS – Bellwether Enterprise Real Estate Capital LLC (Bellwether Enterprise), the commercial and multifamily mortgage banking subsidiary of Enterprise Community Investment Inc. (Enterprise), announced it has closed a $31,552,100 loan for the construction of Village of Versailles, an affordable and workforce housing community in New Orleans, that will help to restore some of the city’s affordable housing supply that was lost during Hurricane Katrina and nearby areas affected by the recent flooding that damaged 60,000 homes. Bellwether Enterprise arranged the financing through the U.S. Department of Housing and Urban Development’s FHA loan program.
Prior to 2005, the site of Village of Versailles housed two 200-unit, HUD-insured apartment buildings, which were built during the 1970s. However, in 2005 flooding and winds from Hurricane Katrina decimated the area, leaving the site to remain vacant—until now. Construction has begun on a new chapter for the New Orleans East neighborhood: once completed in late 2017, the complex will consist of 50 residential, two-story buildings containing 400 units and two one-story community buildings and a leasing office.
The loan’s originator Jon Killough, senior vice president in Bellwether Enterprise’s Alabama office, arranged a HUD 221(d)(4) new construction financing loan for Mirus New Orleans, LLC (Mirus), which features interest-only payments for the first 22 months, with a 40-year term and amortization following. The financing of the project also includes the issuance of short-term tax-exempt bonds, four percent Low Income Housing Tax Credits purchased by City Real Estate Advisors, and HOME Funds provided by the Louisiana Housing Corporation.
“As devastating floods continue to plague Louisiana, helping displaced families rebuild and get their lives back on track via access to stable, resilient housing is vital to our mission. 11 years after Hurricane Katrina, the Village of Versailles is finally experiencing a transformation from a practically vacant complex to what will be a thriving and vibrant community,” said Jon Killough. “The Village of Versailles revitalization required a very complicated financing structure, but our sponsor (Mirus) navigated it exceptionally well thanks to their commitment to putting families in need of affordable housing at the forefront of their work.”
“Our loan for the Village of Versailles is an important transaction for Bellwether Enterprise as it provided a unique opportunity to work with Mirus on the continued revitalization of the New Orleans East area and to restore much needed affordability to the community,” said Phil Melton, executive vice president and director of Bellwether Enterprise’s affordable housing group. “Our work would not have been possible without the close partnership with Mirus and the cooperation of a multitude of state and city agencies, and we are excited to be part of their team to bring the project to life!”
The U.S. is in the midst of a broad housing insecurity crisis that is affecting nearly 19 million low-income families who are homeless or paying more than half of their monthly income on housing, Enterprise reps said. Enterprise’s generational goal is to end housing insecurity, which means no more homelessness and no more families paying more than half of their income on housing. As part of the Enterprise family of companies, Bellwether Enterprise is committed to tapping its experience and nationwide network to help achieve this goal, reps said.