Author Archives: ipgocorp

Will the DOJ Kill FHA Loans Through Their Use of the False Claims Act?

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(RECAP: The purpose of the FHA is “to help creditworthy low income and first time homebuyers, individuals and families often denied traditional credit, to obtain a mortgage and buy a home.” This is achieved through the FHA guarantee provided to lenders who originate FHA backed loans, which provides the FHA will pay out the balance of a mortgage loan in the event of an uncured default. This significantly lowers and practically eliminates the risk of FHA loans to the lender, which then allows them to offer higher loan-to-value ratios and more attractive interest rates to borrowers who would normally not have access to similar terms. This system was successful and aided in achieving the FHA’s goals of promoting home ownership, but this is changing as the DOJ has begun to bring investigations and actions against lenders under the Fake Claims Act.)

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Representative Kuster Introduces Bill to Preserve Rental Assistance for Certain USDA Section 515 Properties

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(RECAP: Last week, Representative Kuster (D-NH) introduced the Rural Housing Preservation Act of 2016, H.R. 4908, which seeks to provide relief to rural multifamily developments financed under the U.S. Department of Agriculture (USDA) Section 515 Rural Rental Housing Loan Program that will lose rental help in the future due to pre-paid or maturing mortgages. Since 2004, USDA appropriations bills have included provisions to make residents of properties with pre-paid mortgages eligible for USDA Section 542 housing vouchers. But, residents in maturing mortgage properties are not eligible for Section 542 vouchers under these provisions. H.R. 4908 would authorize USDA to provide vouchers to eligible residents in properties with pre-paid and maturing mortgages.)

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Security Properties Acquires Two Luxury Apartment Communities in Nashville for $53.73 Million

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NASHVILLE, TN – Security Properties bought Opus 29 and Note 16, a 139 unit and an 86 unit Class A multifamily property, located in Nashville TN for $34.4 million and $19.33 million, respectively.

Opus 29 and Note 16 are located in the urban core of Nashville in the West End and Music Row neighborhoods, respectively. Opus 29 is adjacent to Centennial Park and just Northwest of Vanderbilt Stadium, while Note 16 is located in the Music Row area just East of Vanderbilt University’s Peabody Esplanade and Vanderbilt University Medical Center, and two blocks North of Belmont University. 

Job growth in the submarket is projected to be strong, particularly in the Education and Healthcare Sectors.  Education job drivers include Vanderbilt University, which has over 12,000 students and over 4,000 faculty, Belmont with over 7,400 students, and Tennessee State University with over 9,000 students.  Healthcare is also booming in Nashville, with over 300 healthcare companies  having operations in Nashville including Centennial Medical Center with over 640 beds and Vanderbilt University Medical Center (nearly 20,000 employees).

Security Properties believes in the Nashville market.  According to Barrett Sigmund, Sr. Director at Security Properties in Seattle, WA the acquisition was made because “Nashville is an 18 hour city with strong appeal to millennials and a diverse economy dominated by Education and Healthcare, two industries that have historically been recession resistant.  As we get later in the current real estate cycle, we strive to deploy equity in increasingly strong locations.  These deals, which were bought on an off-market basis, have been capitalized using 10 year, fixed rate debt at 60% LTV.  Nashville is a market, not unlike Seattle that has some small term supply concerns, but with high quality of life, favorable cost of living, strong projected population growth and strong job drivers, these markets should outperform the broader real estate market over the long term.”

Security Properties has bought the assets off-market in a 50/50 joint venture with Loma Linda University.  This represents the 4th and 5th acquisitions between the two groups.

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