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by Derek Hyra, Community Development Expert, OCC PNC MultiFamily Capital is a division within PNC’s Real Estate Finance Group that provides a comprehensive “one-stop shop” for multifamily preservation and other rental housing finance needs. PNC arranges equity for affordable housing through its LIHTC syndication business and invests in tax credits for its own portfolio. On the debt side, PNC offers predevelopment funds for properties with tax credits awards, bridge loans, letters of credit, construction loans, and permanent financing. Diversification through Acquisition Over the last decade, PNC has made a number of acquisitions to obtain the necessary housing finance capacities to form an inclusive unit where all the tools needed for affordable multifamily housing are integrated. These acquisitions include Columbia Housing Corporation, which has specialized knowledge in tax credit syndication; certain assets of the TRI Capital Corporation, which specialized in FHA and Freddie Mac mortgage lending; and ARCS Commercial Mortgage, a Fannie Mae Delegated Underwriting and Servicing (DUS) multifamily lender. PNC has three primary offices specializing in the affordable multifamily businesses in San Francisco, Portland, and Louisville, each representing the key housing sector business acquisitions. As a result of these acquisitions, PNC offers the following financing resources for multifamily affordable housing finance. LIHTC Products The acquisition of Columbia Housing Corporation gives PNC the necessary tools to provide equity for affordable multifamily finance through investments for its own account or on behalf of its institutional clients. Projects may include those receiving 4 percent or 9 percent LIHTCs as well as projects receiving LIHTCs in combination with historic rehabilitation tax credits. PNC also offers a construction to permanent loan program for tax credit transactions. As a major tax credit syndicator, PNC arranges broadly diversified LIHTC multi-investor funds for institutional investors, as well as LIHTC proprietary funds for investors seeking specific portfolio characteristics that are not available in the multi-investor funds. PNC has funded more than $2 billion of tax credit equity investments, syndicated to more than 100 corporate investors as well as made substantial investments in its own portfolio. Mortgage Financing Products PNC is an approved lender under three multifamily loan programs, through which they offer construction and long-term financing products.
Flat Shoals Apartments One illustrative example of when PNC used its various product lines to preserve affordable housing is the Flat Shoals development, a 228-unit apartment complex in Atlanta, Georgia. Originally built in the mid-1960s, Flat Shoals sustained fire damage to two of its buildings in early 2004. To assist in the restoration of these buildings, PNC provided a $9.8 million construction loan and a $4.1 million bridge loan and served as the tax credit syndicator responsible for bringing $6.7 million of equity into the project. PNC also provided a forward commitment from Freddie Mac for the enhancement of tax-exempt bonds during the permanent financing stage. This comprehensive financing structure enabled two developers, Bi-Coastal Development and Craig Taylor/Pro-Housing, to restore this affordable complex to its original state. The rehabilitation of the damaged apartments took three years to complete and was done building by building in phases, so tenants were relocated for a minimal amount of time. The rental units were all one- and two-bedroom apartments, and 90 percent of the units were made available to residents with income at or below 60 percent of the area median income. For more information on PNC, e-mail Amy Vargo, Vice President, Corporate Communications, The PNC Financial Services Group, call her at (412) 762-1535, or visit PNC.
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