Philip Melton, senior vice president of Charlotte, NC-based Grandbridge Real Estate Capital LLC, says the nonprofit from Southlake, TX started the wheels churning in December 2007 to replace the floating rate of the now-illiquid ARS program. "We were really fortunate that Fannie Mae decided to stay with us. There were some times, some challenges, with this deal because of market conditions," Melton says. "There was some concern about whether we could get it finished."

Melton says the 16-asset portfolio's saving grace was that it met Fannie Mae's mission to provide affordable housing. The deal closed practically on the eve of the agency's conservatorship. "If it had gone on too much further, we were looking at a nonprofit that might not be able to keep its doors open," he tells GlobeSt.com. "It created a situation in which they could stay in business."

Melton wouldn't disclose the identity of the nonprofit, but did say the Fannie Mae circuit was aware of the Texas borrower's financial stress due to the collapsed ARS program. Internet research shows the borrower is Atlantic Housing Foundation Inc.