CARMEL, Ind. – Leading financial services provider Merchants Capital today announces the completion of the rehabilitation of a federal Low-Income Housing Tax Credit (LIHTC) project located in Houston, Texas, known as Knolls at West Oaks Apartments, by prominent affordable housing developer, Dominium. Merchants Capital provided $10.8 million in tax credit equity in exchange for the LIHTC. It also originated debt financing for the project under its Government-Sponsored Enterprise (GSE) license. The comprehensive financing package offered by Merchants supported the acquisition, rehabilitation and re-syndication of the residential development, which is an existing, income restricted, LIHTC property originally constructed in 2003.
Set within a larger mixed-use neighborhood with commercial, residential and educational spaces, Knolls at West Oaks consists of 168 total units (84 two-bedroom and 84 three-bedroom floor plans). All units are restricted to individuals earning no greater than 60% of the area median income (AMI).
For the project financing, Merchants Capital originated and will service a Freddie Mac tax exempt loan, a Merchants Bank of Indiana equity bridge loan and a 4% LIHTC equity investment.
“Providing tax credit equity for this development is a major milestone for our company,” said Linda Hill, Executive Vice President of Tax Credit Equity at Merchants Capital. “The tax credit equity division at Merchants has transformed our company into a full-service affordable housing equity provider and lender, enabling us to further our mission of expanding affordable housing options across the country. It was an honor to partner with Dominium to support the longevity of this critical affordable housing development in Houston.”
The renovation included an extensive remodel of the existing clubhouse, a new fitness center and supportive services room, the construction of a new bus stop, installation of a new playground and the addition of a new pavilion and grilling area. Resident units will receive new appliances, quartz countertops, flooring, low-flow plumbing fixtures, a full cabinet replacement and energy-efficient light fixtures.
As part of the renovation, all units were modified to meet current accessibility standards. Five units were converted into ADA units, and an additional four units were modified into audio-visual impaired units, for a total of nine ADA-compliant units.
“We appreciate the partnership and collaboration from Merchants Capital on this rehabilitation that keeps 168 affordable apartment homes in the Houston area,” said Neal M. Route, Vice President and Project Partner at Dominium, the property developer.
Rehabilitation began in August 2021 and was completed in September 2022. Merchants Capital extends their sincere congratulations for the successful completion of the project.