Greystone Provides First Freddie Mac Revolving Credit Facility in Senior Housing for $150 Million
January 7, 2014
Greystone announced it has closed on the first-ever Freddie Mac Revolving Credit Facility for the senior housing sector. The $150 million Facility provides tremendous flexibility and a competitive interest rate. Greystone closed the Facility on behalf of Oakmont Senior Living of Chino Hills, California, and the first transaction was recently funded under the Facility for $29 million.
“We are thrilled with Greystone and Freddie Mac’s combined ingenuity and ability to structure a Revolving Credit Facility that perfectly suits our needs,” said Joe Lin, CFO at Oakmont Senior Living. “The Facility allows us to finance assets off our construction loans sooner than ever before and we can increase the leverage of the Facility as assets stabilize and then again on the exit refinancing,” he added.
Freddie Mac’s Revolving Credit Facility provides significant advantages for senior housing owners with large development and acquisition pipelines or assets requiring time to stabilize. The interest-only product provides a competitive floating rate that is indexed to LIBOR, and allows for up to 75% leverage and an interest-only DSC of 1.50x for independent living and 1.60x for assisted living, at a stressed sizing rate. One of the significant advantages of the Facility, as noted by Lin, is that borrowers can continue to borrow against increased values and income created in the properties, up to the maximum amount of the Facility. Given that lending is based on income in place, and to help with transitional assets, the Facility has no minimum requirements for property occupancy. Generally, the minimum size for a Revolving Credit Facility is $50 million, but the Facility can be closed with as little as one asset totaling $10 million or more.
“We are excited to have been able to provide immediate benefit to Oakmont’s robust development pipeline,” said Scott Kavel, head of Greystone’s senior housing finance group. “Freddie Mac worked with us to close their first-ever seniors housing Revolving Credit Facility in just 45 days from our initial concept meeting. With the enhancements that have been made to the product, the Freddie Mac Revolving Credit Facility merits serious consideration by borrowers as an attractive part of their overall financing strategy,” Kavel added.
“We value the importance of supporting the development and finance of senior housing, and are excited to have worked with Greystone and Oakmont to bring the Revolving Credit Facility to seniors housing,” said Steven T. Schmidt, National Director, Seniors Housing Group at Freddie Mac. “Greystone has served as a trusted partner to date, and we look forward to working with more of their borrowers,” he added.
Greystone, in just its first year as a Freddie Mac Senior Housing Seller/Servicer, is on pace to be one of Freddie Mac’s top five Senior Housing Lenders. Greystone was the number one FHA lender in 2012 and is ranked as a top-10 Fannie Mae lender. Greystone provides mortgage finance solutions across multiple platforms, including FHA, Fannie Mae, Freddie Mac, USDA, CMBS, bridge and other proprietary loan programs.