Merchants Capital secures $19.7 million for housing community in Rochester, MinnesotaStaff Writer | December 28, 2018
Mortgage banking firm Merchants Capital has secured financing for the development of a $19.7 million mixed-income workforce housing community in Rochester, Minnesota.
America Merchants Capital secured the loan through the first-ever Freddie Mac Non-LIHTC
Dubbed Technology Park Apartments, the 164-unit affordable housing complex will help to ease the city's affordable housing crisis, as Rochester was recently ranked one of the lowest metropolitan statistical areas (MSAs) nationally for housing affordability by Nationwide Economics. The project closed on Sept. 5, 2018.
The apartments were financed through a 10-year Freddie Mac Non-LIHTC Forward Commitment loan where the interest rate was locked at the closing of the construction loan.
Non-LIHTC forwards are unfunded, forward commitments for affordable housing developed by nonprofits and subsidized, rent-restricted affordable housing that for-profit developers can use for their new multifamily construction or substantial rehabilitation projects.
Forty percent of Technology Park Apartments will be priced affordably for individuals earning an annual income of $40,000, or 60 percent of the area's annual median income (AMI). The Greater Minnesota Housing Fund contributed a total of $3.4 million in capital for the development of these units, which will cost renters an estimated $1,150 a month for a two-bedroom apartment.
An additional 35 percent of units will be set aside for individuals earning about $55,000 a year, 20 percent below Rochester's AMI. The remaining units will be priced slightly below the current market value, about $200-300 less than similar apartments in the area. ■