But the fund, AFL-CIO Housing Investment Trust, still held the security and was very accommodating in working with JLL and Bainbridge, Filter tells GlobeSt.com.

Then Bainbridge had to see if it could reach the green criteria, which it did.

Bainbridge decided to opt to structure the deal so the prepayment penalty was wrapped in the new rate. “The borrower did not want to pay off the loan until it hit a certain prepayment threshold so it needed a nine-month forward commitment on the rate lock,” Filter said. “That meant we had to time the application to the FHA.”

In the end it all came together and the deal, while having many moving parts, was not the most complicated deal Filter had worked.

“There were some nuances to it though, and that gave us the opportunity to come up with plan which the borrower wasn't even thinking about,” he said.

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BETHESDA, MD–Ever since the Federal Housing Administration changed its mortgage insurance premium thresholds for green and affordable designations last year, JLL has been reaching out to clients to see if they were interested in refinancing. When it contacted Bainbridge, the answer was yes — it wanted to refinance the construction finance loan on Bainbridge Bethesda Apartments, a 200-unit multifamily building, and it wanted the approximate 40 basis point savings meeting the FHA's green criteria would bring, as well as the lower interest rate from the refinancing. There was a significant prepayment penalty attached to its current loan but the company decided to proceed.

The deal turned out to be more complicated than originally expected but the short answer to the question of whether they were able to pull it off is yes. A $60.5 million HUD-insured loan was provided via FHA's Section 223(a)(7) program.

International Director Kevin Filter led the JLL team on the financing for this deal. This is approximately the route it took to close the deal.

First JLL had to reach out to the pension fund that held the Ginnie Mae security backing the loan. If it had sold it off, then it would have been back to the drawing board.

But the fund, AFL-CIO Housing Investment Trust, still held the security and was very accommodating in working with JLL and Bainbridge, Filter tells GlobeSt.com.

Then Bainbridge had to see if it could reach the green criteria, which it did.

Bainbridge decided to opt to structure the deal so the prepayment penalty was wrapped in the new rate. “The borrower did not want to pay off the loan until it hit a certain prepayment threshold so it needed a nine-month forward commitment on the rate lock,” Filter said. “That meant we had to time the application to the FHA.”

In the end it all came together and the deal, while having many moving parts, was not the most complicated deal Filter had worked.

“There were some nuances to it though, and that gave us the opportunity to come up with plan which the borrower wasn't even thinking about,” he said.

Save