LOS ANGELES—Raintree Partners has secured $31.1 million through the Fannie Mae Structured ARM program to refinance a three-property multifamily portfolio in Los Angeles. The portfolio consists of a Taiko Village in Burbank, Villa Sofia in Sherman Oaks and Vista Paradiso in Studio City.

Raintree acquired all three properties in 2011 and 2012. Taiko Village in Burbank received the largest portion of the funds, $11.9 million, while Villa Sofia in Sherman Oaks received $10.5 million and Vista Paradiso in Studio City received $8.7 million. Capital One Multifamily SVPs Kristen Croxton and Greg Reed secured the funds on behalf of the borrower.

“The borrower needed prepayment penalty flexibility to accommodate a possible sale in the near future,” Greg Reed, SVP at Capital One Multifamily Finance, tells GlobeSt.com. “They also wanted to float over LIBOR and maximize the assets cash flow for the remaining hold period. FNMA was able to offer a very competitive spread over LIBOR with interest only for 5 years and loan proceeds that returned a portion of the original equity along with retiring the existing debt. FNMA did not require an interest rate cap but rather a springing cap that requires the borrower to buy a cap only when LIBOR hits 2% (currently at .15%). This was the first of its kind structure for any borrower with FNMA.”

Capital One Multifamily also arranged take-out options for Raintree after the stabilization of its original acquisition financing, which was a floating-rate bridge loan. Capital One kept in close communication with the borrower so that it could to take advantage of accretive debt opportunities in the most timely and beneficial market. The Fannie Mae financing has a start rate sub-2% with no initial-interest rate cap and five-years of interest only. The properties have structured mortgages with 10-year terms and five-year interest only payments.

“These were three highly sought after class-A multifamily properties built to condo spec, so the borrower had no shortage of debt capital sources that were vying for the lending assignment,” says Reed. “FNMA was able to differentiate themselves by offering higher loan proceeds, more interest only, and a longer floating rate term.”

Similarly, a local group of investors refinanced a six-property multifamily portfolio in Los Angeles, securing $25 million in Fannie Mae loans. The loans for each property ranged in size from $2.4 million to $5.5 million, and had a 10-year term with a 30-year amortization and a five-year interest-only payment.