Press Release

SAINT PAUL, Minn. – Leading multifamily financing provider Merchants Capital today announces it has provided more than $77 million in financing for the development of Soul, an affordable, mixed-use development in Saint Paul, Minnesota. The property – owned and developed by the key partner on the project, Schafer Richardson – is a crucial redevelopment project for the city and an important factor in its commitment to expanding and improving access to affordable housing within Saint Paul city limits. Situated on the West Side at the intersection of Robert Street and Plato Boulevard, Soul will provide 178 units of affordable housing to Saint Paul residents and families. The mixed-use complex will be constructed on a redevelopment site of a current city infill location, with all construction completed as 100% union labor and union construction. An environmental cleanup of the area will be associated with the redevelopment. The property was designed, and will be built, to earn an Enterprise Green Communities Certification, and will meet all necessary standards to comply with the City of St. Paul’s sustainable building policy. Additionally, the development will feature a rooftop solar array to support lower electricity rates. Upon completion of construction, Soul will feature one-, two-, three- and four-bedroom units, a unique feature designed to meet the needs of both local individuals and families. Of the total 178 units, 23 three-bedroom and 12 four-bedroom apartments will be restricted at 30% area median income (AMI), providing a deeply affordable option for families. The remaining 143 units comprise one-, two- and three-bedroom floorplans and will be restricted to individuals earning 60% AMI or lower. The 35 deeply affordable units will remain affordable at 30% AMI for 30 years, and all units within the property will remain at 60% or lower for 40 years. A proven leader in the multifamily lending space, Merchants Capital arranged the debt financing for Soul totaling more than $77 million. The firm secured a $33 million Merchants Bank of Indiana (MBI) construction loan, a $16.6 million MBI equity bridge loan and a $27.45 million Freddie Mac Tax-Exempt Loan (TEL) to comprise the total $77 million. RBC Capital Markets served as the equity provider for the project. “Supporting our local residents, families and communities by crafting innovative financing solutions for these much-needed affordable housing properties is what we do best,” said Marsha Goff, Executive Vice President at Merchants Capital’s Saint Paul Office. “Our mission is to work hand-in-hand with local developers and cities to increase access to high-quality, affordable housing, and the development of Soul is a beautiful depiction of that mission in action. We are grateful for the opportunity to showcase our commitment to the residents of Saint Paul and are determined to continue to make an impact in this neighborhood and nationwide.” Marsha Goff Merchants Capital was proud to work alongside Schafer Richardson, together with Greater Minnesota Housing Fund, AFL-CIO Housing Investment Trust (HIT), Freddie Mac, RBC Capital and Ramsey County. The City of Saint Paul also contributed greatly to the project through allocation of American Rescue Plan Act (ARPA) funds and grants to support gap financing. “Soul is Schafer Richardson’s third development with Merchants Capital, and we value their expertise and creativity in getting complicated real estate transactions done,” said Katie Anthony, Vice President of Development at Schafer Richardson. “Soul will add critical affordable housing units and positively activate an important corner of the West Side neighborhood in St. Paul and Merchants partnership is an essential element in that transformation.” The design firm serving as the project architect is Kaas Wilson Architects, and Weis Builders is serving as the project’s general contractor. Construction is currently underway, with an anticipated completion date in Q2 of 2024. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter and LinkedIn and Instagram. ###

CARMEL, Ind. – Leading multifamily financing provider Merchants Capital today announced it has secured a $15.5 million U.S. Department of Housing and Urban Development (HUD) loan for Lakeshore Manor in East Chicago, Indiana. Located on the corner of 136th and Main Street on the northwest side of the city, the new development will bring 206 units of income- and age-restricted housing to the area. Originally designed to replace the now-closed John B. Nicosia senior building, Lakeshore Manor will be entirely new construction, consisting of two four-story buildings that comply with National Green Building Standards (NGBS). The 221(d)(4) new construction deal will allow the property to feature 206 one- and two-bedroom apartment units reserved for seniors 62 years of age and older and/or disabled residents, with rent restricted at 60% of the area median income (AMI). Merchants Capital secured $15.5 million in HUD financing to support development of the project, along with a $13.5 million equity bridge loan through its parent company Merchants Bank of Indiana. Cinnaire, the property’s equity investor, provided a $21.7 million LIHTC investment in the project for a total development cost of $51 million. Upon completion of construction, all units at Lakeshore Manor will feature electric ranges, refrigerators, laminate countertops, ceiling fans, window treatments, central air conditioning and walk-in closets. As a senior housing complex, the development will be subject to Section 100-2 Housing and Urban Development (HUD) Minimum Property Standards and thus will include automatic temperature limit controls in the shower, electrical outlets for night lights between the bed and bathroom, handrails on at least one side of all interior corridors and an emergency call system in each unit. Additionally, 12 of the 206 total units at Lakeshore Manor will be designed as fully accessible, hearing-impaired units and will comply with the American with Disabilities Act (ADA) and Uniform Federal Accessibility Standards (UFAS) requirements. The property’s location in East Chicago makes it part of the city’s ongoing North Harbor Redevelopment Area project, an effort to improve public spaces including streets, playing fields, playground equipment and concert stages at Nunez and Callahan parks. With these proposed upgrades, and the new Lakeshore Manor housing development, the city hopes to provide major economic contributions that will support the long-term sustainability of the area. “Cinnaire has been changing lives and transforming neighborhoods in Indiana for more than 25 years,” said Keith Broadnax, Cinnaire Senior Vice President, Business Development. “We remain focused on creating housing opportunities to ensure seniors can live affordably in the communities they call home. Lakeshore Manor residents will enjoy living in the heart of the revitalization taking place in East Chicago. We’re proud to join our partners at Merchants Capital to make the vision of Lakeshore Manor a reality.” The new property is expected to debut in February 2024. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter and LinkedIn and Instagram.

CHICAGO – The Chicago office of Merchants Capital recently secured a $35.6 million construction loan on behalf of HomeRise for the rehabilitation of San Cristina, a historic 58-unit single room occupancy (SRO) rental property located in San Francisco, which provides housing and support services to formerly homeless residents. The construction loan was provided by Merchants Bank of Indiana (MBI) with participation by the AFL-CIO Housing Investment Trust (HIT). Originally constructed in 1913 as an office building, San Cristina was acquired in 1991 by HomeRise and converted into one of the earliest permanent supportive housing communities in San Francisco. Upon completion, San Cristina will continue to provide affordable housing to the formerly unhoused and improve residents’ quality of life through enhanced support services offered by HomeRise. “We are excited about the opportunity to restore our San Cristina housing to its historical glory. Our funding partnership with Merchants Capital is a vital part of our ability to continue to provide supported housing opportunities,” said Rick Aubry, CEO of HomeRise. San Cristina was one of 27 projects to receive a 2022 California Housing Accelerator Award which allocated $24.2 million to the project as part of the state’s comprehensive strategy to address housing affordability for the state’s lowest-income households. In addition to the award, the project also received funding from the California Department of Housing and Community Development Multifamily Housing Program, the Mayor’s Office of Housing and Community Development and the Federal Home Loan Bank of San Francisco’s Affordable Housing Program through Century Housing Corporation. “Our participation in the rehabilitation of the San Cristina property is part of the AFL-CIO Housing Investment Trust’s continuing commitment under its billion-dollar Bay Area Initiative launched in 2020,” said HIT CEO Chang Suh. “This infusion of capital creates union jobs and provides much-needed housing for people who are at risk and experiencing homelessness.” This investment by Merchants Capital and the AFL-CIO HIT marks the two firms’ second investment with HomeRise, after the recently completed Jazzie Collins Apartments located at 53 Colton Street in San Francisco’s Hub neighborhood. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram.

CARMEL, Ind. – Merchants Capital is pleased to announce the closing of Merchants Capital Tax Credit Equity Fund X, L.P. (Merchants Fund X). Merchants Fund X represents the company’s second and largest national multi-investor fund with a total capital raise of $180 million from 15 institutional investors, including eight repeat and seven new investors. Merchants Fund X will infuse equity into 18 affordable housing properties that will create or preserve more than 2,400 affordable homes in 12 states. The 18 properties included in Merchants Fund X are in California, Texas, North Carolina, Connecticut, Missouri, Indiana, Ohio, Michigan, Illinois, Pennsylvania, Mississippi and Oregon. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram.

CARMEL, Ind. – Leading financial services provider Merchants Capital today announces the completion of the rehabilitation of a federal Low-Income Housing Tax Credit (LIHTC) project located in Houston, Texas, known as Knolls at West Oaks Apartments, by prominent affordable housing developer, Dominium. Merchants Capital provided $10.8 million in tax credit equity in exchange for the LIHTC. It also originated debt financing for the project under its Government-Sponsored Enterprise (GSE) license. The comprehensive financing package offered by Merchants supported the acquisition, rehabilitation and re-syndication of the residential development, which is an existing, income restricted, LIHTC property originally constructed in 2003. Set within a larger mixed-use neighborhood with commercial, residential and educational spaces, Knolls at West Oaks consists of 168 total units (84 two-bedroom and 84 three-bedroom floor plans). All units are restricted to individuals earning no greater than 60% of the area median income (AMI). For the project financing, Merchants Capital originated and will service a Freddie Mac tax exempt loan, a Merchants Bank of Indiana equity bridge loan and a 4% LIHTC equity investment. The renovation included an extensive remodel of the existing clubhouse, a new fitness center and supportive services room, the construction of a new bus stop, installation of a new playground and the addition of a new pavilion and grilling area. Resident units will receive new appliances, quartz countertops, flooring, low-flow plumbing fixtures, a full cabinet replacement and energy-efficient light fixtures. As part of the renovation, all units were modified to meet current accessibility standards. Five units were converted into ADA units, and an additional four units were modified into audio-visual impaired units, for a total of nine ADA-compliant units. “We appreciate the partnership and collaboration from Merchants Capital on this rehabilitation that keeps 168 affordable apartment homes in the Houston area,” said Neal M. Route, Vice President and Project Partner at Dominium, the property developer. Rehabilitation began in August 2021 and was completed in September 2022. Merchants Capital extends their sincere congratulations for the successful completion of the project. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram.

BOSTON – Merchants Capital, recently recognized as the #3 multifamily affordable lender nationwide by the Mortgage Bankers Association (MBA), has opened its sixth regional office location in Boston. After two years of record-breaking success, which included $7 billion in debt financing closed and over $248 million in tax credit equity raised in 2021, the expansion of Merchants into Boston doubles down on the firm’s commitment to growth, particularly in the affordable housing and tax credit equity space. Located in the Prudential Center in Boston’s Back Bay neighborhood, the new office will expand to 20 full-time employees, with a primary focus on the firm’s tax credit equity syndication division. Merchants Capital continues to seek driven employees for a variety of positions at all six offices: Boston, Chicago, Indianapolis, Minneapolis-Saint Paul, New York and Washington, D.C. For career opportunities, visit our careers page. To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, Twitter, LinkedIn and Instagram.

NEW YORK – The New York office of leading multifamily financial services provider Merchants Capital today announces it has provided more than $13 million in financing to a joint venture between Gorman & Company and the Gary Housing Authority (GHA) for the rehabilitation of the historic Carolyn Mosby Apartments in Gary, Indiana. The financing is integral to preserving the affordability of the project for its residents. Located at 650 Jackson St. just west of downtown Gary, Carolyn Mosby Apartments was built by the GHA in the late 1960s as a public housing development. The eight-story high-rise contains 142 units in a variety of one- and two-bedroom floor plans reserved for senior and/or disabled residents earning 30-60% of the area median income (AMI). The project received an allocation of $13 million of tax-exempt bonds from the Indiana Housing and Community Development Authority, enabling GHA to partner with Gorman to convert it from public housing to a long-term Section 8 Housing Assistance Payments (HAP) Contract as a Section 18 public housing disposition and perform much-needed renovations while continuing to provide rental assistance to its residents. Merchants Capital New York facilitated the bond purchase in the form of a $13 million Merchants Bank of Indiana (MBI) construction loan. Following construction completion, the loan will convert to a $5.239 million permanent loan pursuant to a Freddie Mac Tax-Exempt Loan (TEL) Forward Commitment, to be serviced by Merchants Capital. The project also received equity investments totaling approximately $9.7 million in return for federal Low-Income Housing Tax Credits and federal Historic Rehabilitation Tax Credits. Additionally, the project benefits from a variety of soft financing and other incentives, including a property tax exemption, all integral to maintaining the project’s affordability. The financing will allow Carolyn Mosby Apartments to undergo both interior and exterior improvements, including updates to all electrical and plumbing fixtures to improve the energy efficiency and water usage throughout the property. Common residential areas for residents will be upgraded on each floor as well. Construction completion is expected in 2024.

CARMEL, Ind. – Leading financial services provider Merchants Capital today announces that Margaret Lehto has joined the firm as Chief Architect. She will be based out of the company’s Chicago office. Lehto is a demonstrated leader in the architectural industry, with expertise tied to verifying that affordable housing developments meet local, state and federal requirements. Her experience encompasses oversight of assessments, architectural and engineering design and construction administration for a wide variety of public and private sector clients and projects. She is a licensed architect in the states of Illinois and Wisconsin, a member of both the American Institute of Architects and the Association of Licensed Architects and she holds a Leadership in Energy and Environmental Design (LEED) professional accreditation. In her new role with Merchants, Lehto will be responsible for ensuring compliance with underwriting guidelines for debt and equity investments across the company. She will also manage the review of construction due diligence and third-party construction reports throughout the duration of all projects. Additionally, Lehto will use her skillset and knowledge of construction documentation and budget review to ensure projects are appropriately budgeted from the start so that Merchants and its customers will avoid critical issues that may arise later in the project life cycle. Prior to joining Merchants, Lehto’s over 20 years of experience included overseeing all aspects of architectural and engineering projects as well as design and construction services for thousands of affordable housing units and complexes across the Chicago metro area. Lehto is a graduate of Northwestern University with a bachelor’s degree, and she holds a master’s degree in architecture from the University of Illinois.

CHICAGO – The Chicago office of Merchants Capital is pleased to announce that it has closed a 221(d)(4) new construction/permanent loan for Metro 19 Apartments in Roselle, Illinois. The U.S. Department of Housing and Urban Development (HUD)-insured loan will provide construction and permanent financing for 295 transit-oriented, multifamily units adjacent to the Roselle Metra commuter rail station situated half a mile east of the Main Street commercial district. Merchants Capital securitized the loan and worked closely with the AFL-CIO Housing Investment Trust (HIT), which purchased the Ginnie Mae-backed security that guarantees the timely payment of principal and interest on the Metro 19 loan. The HIT, a fixed-income, investment grade mutual fund, has a long history of working closely with for-profit and non-profit developers, housing agencies, members of the mortgage banking community, labor unions, HUD, government-sponsored enterprises (GSEs) and others to structure the financing needed for their real estate developments. As a result of the HIT’s involvement, the luxury apartment complex will be 100% union built – a requirement on all construction-related projects financed by the HIT. “We are proud of everything that HIT and Merchants Capital have accomplished together. In addition to providing much-needed housing, Metro 19 is creating well-paying jobs for trained workers, making a difference to the broader economic health of the community,” said Chang Suh, CEO at AFL-CIO HIT. A key feature of this development, and a unique capability of the Merchants organization, was the ability to finance both the apartment building and an adjacent garage. This garage structure will provide 542 parking spaces for Metro 19 tenants and area commuters who use Metra trains to get to their places of employment. The garage component of the development involved multiple parties including a land swap that made it possible to assemble the land needed for the garage structure. Working with the Village of Roselle, Merchants Bank of Indiana (MBI) was able to provide the financing for this land assembly and construction loan. The loan will be repaid from revenues generated by property value appreciation under an existing Tax Increment Financing (TIF) in the East Irving Municipal District. “This project is exciting for our company, as it allowed us at Merchants Capital a unique opportunity to work in tandem with our colleagues at Merchants Bank of Indiana,” said Lee Oller, Executive Vice President and head of Merchants Capital’s Chicago office. “This complex transaction codified a land swap between Metra and the Village of Roselle to accommodate a parking garage for apartment residents and Metra commuters. The new complex will bring much needed residential units to the area, and we are honored to have been a part of the development project.” “Merchants’ unique ability to originate both the HUD-insured loan on the apartment building, and Bank financing on the parking garage, gave us the flexibility to meet the financing requirements of the various stakeholders and help make the overall development possible,” said Emmett Donovan, Senior Vice President at Merchants Capital. “Metro 19 gave us a chance to finance an important property that will bring nearly 300 housing units to the suburbs of Chicago. We look forward to growing our developer partnerships across the Midwest so that we can continue to provide even greater access to housing for residents across the region.” This is the second HUD-insured project Merchants has financed with the developer, Avgeris and Associates. The five-story building is designed around a central courtyard and amenities include a business office, fitness center, golf simulator, dog spa, outdoor pool and enclosed rooftop lounge. The property will also receive a National Green Building Standard (NGBS) certification upon completion of construction. The green certification ensures that the property will operate at peak energy efficiency, reducing utility costs for both the developer and building residents. Construction is underway with leasing anticipated to begin in late 2023. “We couldn’t be more excited about our Metro 19 Apartment development in downtown Roselle. This high-end building in a TOD location will be an excellent addition to the other luxury apartment communities in our portfolio. Our residents love being able to walk or bike to public transportation, restaurants, shops and local nightlife. We are excited to have broken ground on the Metro 19 development. It would not have been possible without the hard work and strong support from the Village of Roselle, HUD, the AFL-CIO HIT, METRA, and of course Merchants Capital and Merchants Bank of Indiana,” said Tim Knudson, Vice President at Avgeris and Associates. ###

CARMEL, Ind. – Leading financial services provider Merchants Capital (MCC), along with Merchants Bank of Indiana (MBI), announces today that it has completed a $214 million Commercial Mortgage Backed Securities (CMBS) securitization of 14 multifamily mortgage loans secured by 24 mortgaged properties through a Freddie Mac-sponsored Q-Series transaction. This is MCC’s second such transaction – last year, MCC secured a $262 million Q-Series transaction, which consisted of 15 workforce housing properties owned and operated by some of MCC’s biggest clients. Unlike the previous transaction, 100% of the securities were guaranteed by Freddie Mac and sold to the market. MCC will continue to sub-service the loans in the pool. The $214 million in loans consisted of 14 multifamily properties in Georgia, Indiana, Michigan, New York and Ohio. The developments range in size from 60 to 352 units. On a weighted average basis, the portfolio had 93.7% of units under 80% area median income (AMI), 52.1% of units under 60% AMI and 26.8% of units under 50% AMI. Several properties were made possible by low-income housing tax credits (LIHTC) and the U.S. Department of Housing and Urban Development (HUD). The collateral pool is all seven-year capped adjustable-rate mortgages (ARMs), a new product for the platform. Due to the characteristics of the underlying mortgage loans, the certificates are designated as “Social Bonds” within the Social Bonds Framework, published on Freddie Mac’s website. Proceeds from Social Bonds are used to provide liquidity to social impact financial institutions (community development financial institutions, housing finance agencies and other financial institutions), such as MBI. These social impact financial institutions finance affordable housing to low-income communities and underserved populations consistent with the Social Bonds Framework. Freddie Mac engaged Sustainalytics, Inc., an affiliate of Morningstar, Inc., to independently evaluate the Social Bonds Framework. MCC has also created its own ESG Social Bonds Framework for use in their future deals, aligning with the four core components of the Social Bond Principles from Freddie Mac, and similarly evaluated by Sustainalytics. The ongoing assessment is based on the use of proceeds, project evaluation and selection, management of proceeds and reporting.