Crux Commercial Partners secured $19.05 million to help fund the purchase and renovation of a large LIHTC multifamily asset in the Pacific Northwest. Terms included a 5-year fixed rate, interest-only period, and no reserves, even with a first-time affordable housing borrower.
When a longtime client set their sights on acquiring a deed-restricted multifamily property in the Pacific Northwest, they turned to Crux Commercial Partners to help navigate the complexities of LIHTC financing, despite never having closed a deal in the affordable space before.
The asset, a 200+ unit multifamily property with 20% vacancy, came with the added challenge of Low-Income Housing Tax Credit restrictions. These deals often scare off lenders due to compliance hurdles and tighter cash flow projections. But Crux structured a creative solution that not only worked, it saved the client nearly $700,000 upfront.
Crux Commercial Partners arranged $19.05 million in acquisition financing for a Pacific Northwest multifamily property governed by Low-Income Housing Tax Credit (LIHTC) restrictions. The borrower, a repeat client with no prior experience in affordable housing, aimed to acquire and rehabilitate the 200+ unit asset while bringing operations up to AMI thresholds.
LIHTC properties carry compliance requirements and income restrictions that often limit financing options. Crux navigated these constraints by structuring a proforma-based loan that accommodated the property’s 20% vacancy and eliminated the need for operating reserves; reducing the client’s upfront costs by nearly $700,000. The result was a fixed-rate, flexible structure designed to support both the acquisition and long-term repositioning of the asset.
This financing structure gave the client room to improve operations while avoiding the typical liquidity demands that come with deed-restricted acquisitions.
Project Financing Highlights:
• Loan Amount: $19,050,000
• Location: Pacific Northwest
• Property Type: LIHTC multifamily (200+ units)
• Loan Structure: Proforma-based acquisition loan
• Rate/Term: 6.4% fixed, 5-year fixed rate, 10-year total term, 30-year amortization
• Interest-Only Period: 12 months
• Vacancy at Close: 20%
• Operating Reserves: None required
• Borrower Type: Repeat client, first LIHTC transaction
“In today’s environment, placing a high-leverage loan on a deed-restricted asset with 20% vacancy and no borrower history in the LIHTC space requires precision,” said Jacob Wilson, co-founder of Crux Commercial Partners. “We were able to present a strong proforma, navigate lender concerns, and eliminate reserve requirements, saving our client nearly $700,000 in upfront capital.”
Crux’s hands-on approach from underwriting through close helped mitigate perceived risk and position the deal for approval. The firm’s capital relationships and credibility in the market played a critical role in securing favorable terms on an otherwise complex, high-risk transaction.
This deal is another example of how Crux brings strategy and execution together to help clients enter new markets and tackle tough deals with confidence.
To learn more about this type of financing, visit cruxcre.com/multifamily-real-estate.
