METAIRIE, La. — Sims Mortgage Funding (SMF), a subsidiary of HJ Sims, has arranged a $10.8 million loan for Metairie Manor in the New Orleans suburb of Metairie.
In 2012, SMF refinanced Metairie Manor, a 287-unit, Section 8, affordable seniors housing community owned and managed by affiliates of the Archdiocese of New Orleans. That refinancing, which paid off its HUD Section 202 direct loan, produced approximately $250,000 in annual debt service savings that have been used to fund wellness and affordable nutrition programs, resident units deep-cleaning services and enhanced transportation options.
Interest rates for HUD-insured loans have dropped since the 2012 refinancing, motivating the Archdiocese to work again with SMF in order to evaluate options to generate more debt service savings.
SMF originated a new HUD-insured loan under the Section 223(a)(7) program, an expedited review option that does not require an appraisal and has a pared-down application and underwriting format. This minimized the time it took to develop the application and loan underwriting, as well as for HUD to review and approve the transaction.
The 223(a)(7) loan reduced the project’s interest rate by 33 percent and produced an annual debt service savings of $118,000. Moreover, in order to maximize annual debt service savings, SMF negotiated an extension of the loan term of almost 10 years. SMF built approximately $700,000 into the new loan to supplement the existing reserve for replacements fund, offering a stable platform to provide for the community’s physical future needs.
The Metairie Manor refinancing is the 11th HUD-insured loan SMF has closed for the Archdiocese and its management affiliate, Christopher Homes Inc.