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.
“Preserving existing affordable housing developments is just as important as financing new properties, so we were honored to partner on the Carolyn Mosby project in Indiana,” said William Jones, Senior Vice President at Merchants Capital New York. “This was a complicated deal in which all stakeholders worked creatively to get to closing. The rehabilitation of the Carolyn Mosby Apartments will be a tremendous asset to the existing residents as well as members of the Gary community.”
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.