Loan Closings

CARMEL, Ind. (May 9, 2019) – Mortgage banking firm Merchants Capital has arranged nearly $50 million in total financing for three assisted living communities in Ohio: The Ashford at Mt. Washington, The Ashford on Broad and The Ashford on Sturbridge. Merchants Capital secured the bridge loans on behalf of Wallick Communities, which develops affordable assisted living and memory care communities. The bridge financing allows the communities to continue leasing and reach the required time beyond construction completion in order to be eligible to be insured by the Federal Housing Administration (FHA). “Our team closed these loans in less than 70 days from the day of engagement,” said Michael R. Dury, president of Merchants Capital and the portfolio’s leading originator. “We were able to simplify the process because of our unique ability to execute the bridge loan through our parent company, Merchants Bank. During the bridge loan application process, we were able to advise them on structuring the takeout financing via FHA.” The first community, The Ashford at Mt. Washington, received $13 million in financing over 24 months. The 108-unit community is located in Cincinnati, Ohio. The Ashford on Broad received $16 million in bridge financing over 36 months. Comprised of 131 units, the community is located in Columbus, Ohio.  The third and final community is The Ashford on Sturbridge, which received $20 million in financing over 42 months. The 124-unit community opened in early 2019 and is located in Hilliard, Ohio, a middle-class suburb of Columbus. All three communities are designed to serve working- and middle-class seniors, offering rents at 15–30% below those in similar communities. In addition, by using Ohio’s Medicaid Waiver program, residents are allowed to stay once their financial resources have been exhausted. “As baby boomers age and the costs of senior health care continue to rise, the need for affordable, well-maintained communities like these are becoming more and more critical,” said Tom Feusse, CEO of Wallick Communities. “Partnering with Merchants Capital on these projects was vital to our work and fulfilling our mission of Opening Doors to Homes, Opportunities and Hope to seniors across Ohio.” Merchants Capital is a leading multifamily lender offering customized loan products for independent living, assisted living, memory care and skilled nursing projects. A variety of loan products are available to accommodate construction, rehabilitation, acquisition and refinancing of healthcare properties throughout the country.

To our valued customers, Since opening our doors in 1990, the Merchants Capital team has worked tirelessly to become nationally recognized as a leader and premier provider and servicer of multifamily, senior and student housing. Recently, our hard work and commitment was recognized by Affordable Housing Finance. We’re proud to announce that Merchants Capital was named in the Top 10 Affordable Housing Lenders of 2018!This accomplishment is evidence of our commitment to advancing affordable housing nationally and ranks us among the top affordable lenders in the country. In 2018 alone, our originations team closed 207 loans and generated nearly $2.6 billion in new loan production nationwide.  That included $1.10 billion in affordable housing, demonstrating a 146 percent increase in affordable housing production compared to 2017. Over the past 28 years, Merchants Capital has originated and closed more than $13.8 billion in loans. Thank you for your continued support and loyalty. We wouldn’t be where we are today without your commitment to Merchants Capital. Sincerely, Michael R. Dury, President, Merchants Capital WE ARE MERCHANTS CAPITAL A Multifamily, Affordable, and Healthcare Lender offering a direct way to access fixed rate, long-term, non-recourse financing via our bank, Merchants Bank, all with a single point of contact.

Developments to provide more than 650 affordably priced units for NYC residents CARMEL, IN (Mar. 29, 2019) – Mortgage banking firm Merchants Capital has secured financing for two affordable housing developments, totaling more than $180.6 million, in the New York City area: MEC 125th Street and Caton Flats. Both transactions executed a novel risk-share structure between Merchants Capital, Freddie Mac and New York City Housing Development Corporation (NYCHDC) as the local housing finance agency. These risk-share loans are structured as permanent forward commitments to take out the new construction loans. “The creativity of these two transactions is unparalleled. We are incredibly thankful to our partners at Freddie Mac and NYCHDC for their inventiveness, as well as to our clients for their commitment to ensuring the development of truly transformative projects,” said Mathew Wambua, executive vice president at Merchants Capital. “These projects are a testament to our continued mission to provide quality affordable housing to workforce and low-income families.” Located in East Harlem, MEC 125th Street is a 19-story, 404-unit mixed-use, mixed-income complex that will bring much needed affordable and market-rate units to this revitalized neighborhood. In coordination with NYCHDC, New York City Housing Preservation and Development (NYCHPD), New York City Economic Development Corporation (NYC EDC), Freddie Mac, Citi Community Capital, Blank Rome LLP and Sidley Austin LLP, MEC 125th Street is key in providing greater affordability to residents in Manhattan. The development was financed through a $120 million, 35-year Freddie Mac Forward Commitment loan secured by Merchants Capital on behalf of The Richman Group Development Corporation. “We are excited to be partners in what will be a remarkable addition to thriving East Harlem and to be part of the community,” said Kristin Miller, president of The Richman Group Development Corporation. “This is the culmination of the efforts of many talented people and organizations, as well as over 10 years of hard work and perseverance. It will be amazing to see this project come to fruition.” Fifty percent of the project’s apartments will be offered at rents ranging from 37 percent of the area’s annual median income (AMI) to 80 percent AMI. An additional 23 percent of units will have rents ranging from 130 percent AMI to 145 percent AMI, and the remaining 27 percent will be market rate. The development site is conveniently located one block from the 125th Street Subway and two blocks from Harlem 125th Metro North Station, providing easy access throughout the city and the greater New York Area. The second development, Caton Flats, is the much-anticipated revitalization of the Flatbush Caton Market (FCM), a destination of Caribbean commerce, entertainment and culture in New York City. The approximately 280,000-square-foot, 255-unit project is being developed by BRP Development, Urbane Development and the Caribbean American Chamber of Commerce and Industry (CACCI) in coordination with the NYCHDC, the NYCHPD, NYC EDC, Freddie Mac, Citi Community Capital, Blank Rome LLP and Sidley Austin LLP. Loan proceeds will fund the development of mixed-income housing, ground floor retail, space for community groups, a business incubator, and a new home for the Flatbush Caton Market. Merchants Capital secured the loan through the new Freddie Mac Non-LIHTC Forward Commitment on behalf of BRP Development Corporation. 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. “The financing secures the future of Caton Flats as an incredible source of affordable housing and economic opportunity for community residents and entrepreneurs,” said Andy Cohen, director of development for BRP Companies. “In addition to providing the neighborhood with much-needed housing, Caton Flats will also serve as a center of commerce, entrepreneurship and culture for Flatbush and the surrounding community.” Ten percent of the Caton Flats apartments will be priced affordably at 37 percent AMI. Fifteen percent of the units will be set at 57 percent AMI, and another 25 percent set at 90 percent AMI. The other half of the Caton Flats apartments will have rents capped at 130 percent AMI.

CARMEL, IN (Dec. 27, 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. Merchants Capital secured the loan through the first-ever Freddie Mac Non-LIHTC Forward Commitment on behalf of Real Estate Equities. 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. “We appreciate the opportunity to assist in the development of this housing community and the chance to help close Rochester’s affordable housing gap,” said Michael R. Dury, president of Merchants Capital. “We were able to simplify the process with our ability to provide the construction financing through our parent company, Merchants Bank, and also offer the Freddie Mac Non-LIHTC Forward Commitment product for the long term permanent financing.” 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. “We are very excited to be on the forefront of developing a modern workforce housing product that is not heavily reliant on government funding sources,” said Alexander Bisanz, director of acquisitions at Real Estate Equities. “Partnering with the Greater Minnesota Housing Fund to provide low-cost, mission-driven equity – as well as structuring attractive financing with Merchants Capital – truly allowed us to get this project off the ground.” 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. “In all of Greater Minnesota Housing Fund’s work to create and preserve unsubsidized affordable housing, we have struggled to crack the code on the production of new affordable units without reliance on public resources. Now, as an equity partner in Technology Park, we are furthering our mission and innovating ways to increase the funding pie with new financing solutions,” said Rachel Robinson, fund manager with Greater Minnesota Housing Fund. “Going forward, Tech Park, with 164 modestly priced apartments, 66 at reduced, affordable rents, will be a pilot for further innovation in this realm.” Technology Park’s cost-efficient, smart building design achieves sufficient economies of scale to charge modest rents, meeting the needs of a range of household incomes. Today’s market financing tools are working best for luxury apartment construction, and at the other end of the spectrum, affordable apartment developments financed with federal tax credits are limited in supply. Developers have struggled to find ways to finance new construction homes that are in between: achieving modest rents for residents without government subsidy. Freddie Mac’s new Non-LIHTC Forward Commitment achieves this. “Freddie Mac’s forward commitment is helping to provide affordable housing for valued members of the Rochester, Minnesota, community who struggle to find it,” said David Leopold, vice president of targeted affordable sales & investments at Freddie Mac Multifamily. “We created Non-LIHTC Forwards for this very purpose – to provide the flexibility and certainty mission-driven investors need to finance housing for low- and very-low income families.” Technology Park Apartments will be located in Rochester, Minnesota, on the north side of Technology Drive Northwest between Valleyhigh Drive and West Circle Drive. Neighboring Benchmark Electronics to the east, Costco to the south and Crooked Pint to the west, the complex is positioned in close proximity to grocery stores and other nearby amenities.

Carmel, Indiana-based PR Mortgage & Investment Corp. (“PR Mortgage”) secures financing for the development of a $28.5 million workforce housing community in Indianapolis. This unique “workforce” housing development is a joint venture between Strategic Capital Partners, LLC and Goodwill of Central & Southern Indiana. The plans include constructing 208 units comprised of studios, one- and two-bedrooms, at the southwest corner of West Michigan Street and White River Parkway, in the River West neighborhood. The project is targeted toward middle-income workers who want to live within one mile of their workplace but who can’t afford higher downtown rents. “Strategic Capital Partners is a valued client and we appreciate the opportunity to assist in the development of this housing community.  Our ability to provide construction financing through our parent company, Merchants Bank while advising on options for permanent debt at stabilization, creates a seamless process from application to closing. Riverview Apartments are a value-add to downtown Indianapolis, providing housing options for middle-income workers, contributing to the vitality of the community”, said Michael R. Dury, President of PR Mortgage. “SCP was fortunate to have such a strong partner in PR Mortgage on this complex transaction.  The team at PR showed a solutions-driven mindset leading up to closing and their execution was the lynchpin in allowing this project to move forward.  We thank them for their continued advocacy of this important development”, said John Sweet, Chief Investment Officer of Strategic Capital Partners. All the units are reserved for those with incomes between 61 percent and 120 percent of the area median income which is currently $30,000 to $60,000 annually. The development will include a fitness center, free onsite parking and outdoor amenities.

Carmel, INDIANA (5/17/2017) – PR Mortgage & Investments, together with its parent company Merchants Bank of Indiana partnered with Birge & Held Asset Management, LLC to provide financing for Lakeshore Apartments, a multifamily property located in Indianapolis, Indiana.  Financing of the acquisition of the property was completed with a bridge loan through Merchants Bank of Indiana in September 2016.  In May 2017, permanent financing was provided through an FHA 223(f) loan via PR Mortgage & Investments.  PR Mortgage & Investments is proud to partner with Birge & Held Asset Management, LLC and its affiliates (the borrower) to serve residents in their community.  This acquisition represents the largest closing in company history for PR Mortgage, the largest sale in the City of Indianapolis, and the second largest in the State of Indiana. The property contains 740 residential dwelling units originally built in 1988.  With financing provided by the FHA loan, Lakeshore’s $12.6 million renovation project will include new HardiePlank® siding on all buildings, exterior painting, clubhouse and common area upgrades, roof replacement, new gutters and downspouts, and other grounds improvements.  In all apartment homes, renovations include: installation of new kitchen and bathroom cabinets, countertops, new lighting and hardware, new flooring in apartment common areas, new appliances, and interior painting. “Birge & Held is a valued client of PR Mortgage and we appreciate the opportunity to assist in their growth.  Having made them one of their first loans, PR has been fortunate to help them expand their portfolio to over 5,300 units today.  They are experts in implementing a value-add rehab strategy in conjunction with FHA’s 223(f) program, which allows them to leverage the improvements and lock in historic low interest rates for 35 years.  The seamless process from the time of acquisition with the Merchants Bank loan to closing of the PR Mortgage FHA loan allows them to be efficient with their resources.  Birge & Held also has an incredible asset management team that manages the properties long term after the rehab is complete.  It is a win-win for all parties, especially the residents of each community”, said Michael R. Dury, Executive Vice President and COO of PR Mortgage & Investments. PR Mortgage has had a relationship with Birge & Held principals, J. Taggart Birge and Andrew J. Held, since 2012.  The principals own and operate their multifamily properties through their management company, Birge & Held Asset Management, LLC. “PR Mortgage & Investments continues to prove itself as a consistent and dedicated finance provider, and working with the team on the closing of the loan for Lakeshore Apartments has been an excellent collaborative process,” said Andrew Held, Principal of Birge & Held Asset Management LLC. Both Merchants Bank of Indiana and PR Mortgage & Investments appreciate the opportunity to work with Birge & Held Asset Management, LLC and look forward to providing more service in the future.

Carmel, INDIANA (1/18/2017) – PR Mortgage & Investments (PR) is proud to announce record results for 2016.  The company finished the year with more than $1.17 billion in mortgage originations, the second highest in the company’s 26 year history, 20,931 total housing units, and 152 total loans. The key highlights of these record performance numbers consisted of Affordable Housing Financings at 30% of total volume, the highest in company history.  Loan volume for 221(d)4 financings exceeded $161 million with 1,957 total housing units.  Also, more than $505 million in loans, 43% of total volume, were closed using Merchants Bank of Indiana, the parent company of PR Mortgage & Investments. PR Mortgage’s servicing portfolio volume also hit record performance numbers in 2016 with 944 active loans exceeding $6 billion, the highest in company history. “We at PR Mortgage are very proud of our accomplishments in 2016 and share in our success with our customers and banking partners. Utilizing Merchants Bank of Indiana in conjunction with FHA and the GSE’s have given us a competitive advantage and provides very competitive financing options for our clients. With the continued growth of the bank and competitive GNMA pricing, we expect momentum to continue in 2017,” said Mike Dury, COO of PR Mortgage & Investments. PR Mortgage & Investments is headquartered in Carmel, Indiana. PR is an approved FHA Mortgagee and is an approved Multifamily Accelerated Processing (MAP) lender for HUD.  PR Mortgage is also a Rural Housing Service (RHS) approved lender for the Section 538 program.  The company is a Government National Mortgage Association (GNMA) Issuer of Mortgage Backed Securities (MBS).  These agencies offer secondary market programs that provide a full range of loan structures for multifamily rental projects and health care facilities. Through these programs, PR Mortgage & Investments can provide acquisition, refinance, rehabilitation, and new construction loans.  These programs offer competitive long-term, fixed-rate loans that meet the needs of our clients.  Through its parent company (Merchants Bank of Indiana), PR Mortgage offers floating and fixed rate interim construction and acquisition/rehab loans.

Congratulations to PR Mortgage & Investments and the Evansville Housing Authority for closing two RAD projects; the first projects successfully closed in the state of Indiana utilizing RAD alongside the FHA 221(d)4 program.  RAD, which stands for Rental Assistance Demonstration, allows PHAs (Public Housing Authority) and owners of HUD-assisted housing to preserve and improve affordable housing units that could be subject to vouchers and demolition.  These types of deals provide a greater funding certainty for potential lenders and increase the operational flexibility for PHAs and owners to service their communities.  PR Mortgage & Investments is proud to assist the Evansville Housing Authority in their quest to provide affordable housing and serve residents in their community. Located in Evansville, Indiana, the subject properties contain over 700 units which provide public housing for seniors.  Originally built between 1965 and 1971, the properties will be substantially rehabilitated using the financing provided by PR Mortgage & Investments. The complete rehab will include installation of geo-thermal HVAC systems, replacement of sanitary sewer risers, new signage, repairs to exterior and interior buildings, installation of new fire alarm systems as well as other needed maintenance. The properties will be modernized and energy efficient.  The cost associated with the combined rehab was approximately $18 million.  With these improvements, the properties will be able to provide affordable housing for years to come.

Carmel, INDIANA (1/15/2016) – PR Mortgage & Investments (PR) is proud to announce record results for 2015.  The company finished the year with more than $1.15 billion in mortgage originations, the second highest in the company’s 25 year history. The key highlights of these record performance numbers consisted of more than $416 million in Affordable Housing Financings, the highest in company history, 21,423 total housing units, and 151 total loans.  More than $340 million in loans were closed using Merchants Bank of Indiana, the parent company of PR Mortgage & Investments. “We at PR Mortgage are very proud of our accomplishments in 2015 and share in our success with our customers and banking partners. Utilizing Merchants Bank of Indiana in conjunction with FHA has given us a competitive advantage and provides one of the best financing vehicles for our clients. With the continued growth of the bank and the launch of FHA’s new Small Balance Risk Sharing Program, we expect momentum to continue in 2016,” said Mike Dury, COO of PR Mortgage & Investments. PR Mortgage & Investments is headquartered in Carmel, Indiana. PR is an approved FHA Mortgagee and is an approved Multifamily Accelerated Processing (MAP) lender for HUD.  PR Mortgage is also a Rural Housing Service (RHS) approved lender for the Section 538 program.  The company is a Government National Mortgage Association (GNMA) Issuer of Mortgage Backed Securities (MBS).  These agencies offer secondary market programs that provide a full range of loan structures for multifamily rental projects and health care facilities. Through these programs, PR Mortgage & Investments can provide acquisition, refinance, rehabilitation, and new construction loans.  These programs offer competitive long-term, fixed-rate loans that meet the needs of our clients.  Through its parent company (Merchants Bank of Indiana), PR Mortgage offers floating and fixed rate interim construction and acquisition/rehab loans.

PR Mortgage & Investments (PR) is proud to announce the closing of Castle Point Apartments, located just north of the University of Notre Dame. The project was constructed in phases from 1974 to 1980 and has been a landmark in the South Bend community for years. The acquisition involves about $5 million of rehab including clubhouse renovations, interior unit renovations (lighting, flooring, countertops, appliances), installing new washer and dryers, exteriors renovations, and new carports. The buyer, an affiliate of Metonic Real Estate Solutions, purchased the project with convention bridge financing through Merchants Bank of Indiana, the parent company to PR Mortgage. PR Mortgage refinanced the bridge loan with long-term debt through FHA through their 223 (f) permanent loan program. “We at PR Mortgage are very pleased to contribute to such a great acquisition strategy. Metonic’s expertise on the construction and management side will allow for a seamless rehab process and ensure the long-term viability of the project for the residents of the South Bend community,” said Mike Dury, COO of PR Mortgage & Investments. The two-step process allowed Metonic to purchase the project quickly through MBI and then process the loan efficiently through PR Mortgage with FHA to lock in these historically low fixed rates. “The leverage, fully amortizing debt and non-recourse are very attractive and this two-step loan process is one of the most competitive products on the market,” said Dury. Metonic Real Estate Solutions is based in Omaha, Nebraska. The principals have participated in the acquisition, financing, asset management and disposition of more than $2 billion of real estate. This is their second project in Indiana. Both projects were financed by PR Mortgage & Investments.