CARMEL, Ind. (Nov. 4, 2019) – Mortgage banking company Merchants Capital has secured $25.5 million in funding for workforce housing development The Wesmont through a 10 year, Freddie Mac Unfunded Forward Permanent Loan on behalf of TWG Development.
Located just north of downtown Indianapolis in the Monon16 neighborhood, The Wesmont addresses the need for quality workforce housing in the heart of the city. The property is being developed in an Opportunity Zone and repurposes a former industrial site. Construction is expected to complete within 18 months.
The project is funded through a combination of a conventional construction loan from Merchants Bank of Indiana paired with a forward committed Freddie Mac Non-LIHTC permanent loan. Additional funding sources include a private Opportunity Zone investment of approximately $4.6 million along with approximately $460,000 in Indiana Industrial Recovery Tax Credits. Known as the DINO tax credit, these credits provide an incentive for companies to invest in former industrial facilities requiring significant rehabilitation or remodeling expenses. In addition, the project was awarded a $1.47 million tax abatement which will be realized over 10 years.
“Merchants is driven by our passion to provide affordable housing options nationwide,” said Brian Emmons, senior vice president of Merchants Capital and leading originator on the deal. “This loan type offers flexible transaction structuring and certainty of execution at lower costs to borrowers like TWG. Our clients get the financing they need for affordable and workforce multifamily properties funded by public or mission-driven financial investment – whether it’s for new construction or major rehabilitation.”
The 188-unit mix will provide 19 units for tenants at or below 60% Area Median Income (AMI), 19 units for tenants at or below 80% AMI and 132 units for tenants at or below 100% AMI. The remaining 18 units are set at market rates.
The apartment homes will feature a common lounge area with full kitchen, free Wi-Fi, a 24/7 fitness center, business center and an outdoor pool with private pool deck and grilling area. High-end unit finishes include granite countertops, stainless steel appliances, tile backsplashes, spa-inspired bathrooms and private balconies.
“TWG is proud to partner with Merchants Capital and Freddie Mac to bring this mixed-income, workforce housing community to the blossoming Monon16 area surrounding the intersection of 16th Street and the Monon Trail,” said J.B. Curry of TWG Development. “The Wesmont is our third phase of involvement in the redevelopment of this dynamic neighborhood, which has enormous potential to serve every income level of the Indianapolis community. The first two phases include Monon Lofts, serving a mixed-income tenant base and completed in 2018, and the office build out for Lessonly, Inc., completed this past summer.”
TWG Development in partnership with Monarch Private Capital finalized the loan structure and successful closing on Aug. 9, 2019.