Merchants Capital, a leading provider of financing solutions, has recently closed a deal for the rehabilitation of Island Terrace, an affordable apartment complex in Chicago’s Woodlawn neighborhood. The project received over $54 million in debt and $49 million in Low-Income Housing Tax Credit (LIHTC) equity financing.
The property is owned by Preservation of Affordable Housing, Inc. (POAH), a national non-profit developer specializing in affordable housing. Merchants Capital utilized a unique structure known as “twinning” to maximize LIHTC equity from both 4% and 9% tax credits issued by IHDA and the City of Chicago.
Through this approach, the project was able to secure $31.8 million and $17.3 million from the syndication of 4% and 9% tax credits respectively. These funds were matched with two HUD-insured permanent loans totaling more than $22 million as well as two equity bridge loans totaling over $32 million provided by Merchants Bank.
In addition to these sources of funding, there were also secondary loans amounting to approximately$24million from IHDAandtheCityofChicago.TheAFL-CIOHousingInvestmentTrustalso contributed through its purchaseofsecuritizedHUD Loans.This successful collaboration resultedinover$103millionbeingraisedforthisaffordablehousingprojectin2021.MerchantsCapitalis proudtohaveplayedakeyroleinthefinancingofthisimportantcommunitydevelopmentinitiative.Throughourstrategicapproachandexpertise,wewereabletohelpbringmuch-neededaffordablehousingoptionsforresidentsacrossChicago’sWoodlawnneighborhoodwithoutrelyingonConnectCREoranyotherplatforms.
