The buyer of the two properties was WNC & Assoc., an Irvine-based firm that has been active in the affordable housing industry since 1971. The loans were underwritten by Love Funding chief underwriter Denise Troeschel.

Coral Wood Court and Orangewood Court set aside 10% of the units for households with incomes at or below 50% of area media income, with the rest of the units reserved for those at or below 60% AMI. HUD's pilot program also applies to projects with Section 8 HAP contracts.

“HUD is dedicating a lot of time, energy and resources to make sure this program is a success, and the market is responding in force,” Vanar said in a prepared statement. In the Los Angeles HUD office alone, there are 17 other LIHTC pilot transactions pending, he said. In this instance, HUD's Los Angeles office took only 25 business days to process the applications and commit to insure. Added up, total application handling time between Love Funding and HUD came in just over four months, less than half the time of a typical HUD construction loan.

The pilot program also increased allowable repairs tied to hard construction costs from $17,500 per unit to $40,000 per unit. Both properties involved in the transaction will take advantage of the new threshold, with renovations planned to upgrade the kitchens and bathrooms, repair roofing and other outdoor infrastructure, and replace carpeting, among other improvements. Orangewood will undergo a $3.2-million rehab and Coral Wood will receive a $3-million rehab.

“We were pleasantly surprised with the timing of this transaction,” said Anand Kannan, SVP of community preservation and finance at WNC & Assoc. “The financing structure was complicated. But we had the right team in place both on our side and on Love Funding's side to make sure it was executed smoothly.” The transactions also permitted WNC & Assoc. to re-syndicate 4% low-income housing tax credits on the two transactions through a relatively new financing structure that combines short-term, cash-collateralized bonds with the sale of taxable Ginnie Mae securities.

“We are seeing a lot of interest from the affordable multifamily community in this financial structure.” said Kent Neumann, a partner at the Eichner Norris and Neumann law firm, in a prepared statement. The firm pioneered the structure several years ago. “This structure allows the developer to benefit from the historically low taxable interest rates currently available in the capital markets while significantly reducing the amount of negative arbitrage typically associated with these transactions.”

In addition to the HUD program, Love Funding also provides FHA multifamily financing using 4% and 9% LIHTCs for substantial rehabilitation and new construction.

As previously reported by GlobeSt.com, Linda Vista Community Hospital, the site of many horror movie film shoots, is being transformed into low-income senior citizen housing.