Suburban Chicago Project-Based Section 8 (HAP Contract) and Conventional Apartment SaleKyle Shoemaker
In January, 2017, AHIB completed a suburban Chicago project-based Section 8 (HAP Contract) and conventional apartment sale in Woodridge, Illinois. The 176 unit family property had 40% of the units covered by a project-based Section 8 (HAP Contract) contract administered by IHDA and the remaining units operating as market rate. Ownership had recently placed an FHA-insured, HUD 223f loan, which had an attractive interest rate at 3.58%, but high reserve requirements and a low loan-to-value at the target pricing, and a significant pre-payment penalty.
Multiple offers were procured from a mix of both market and affordable focused investors. The offer the ultimately provided the Seller with the highest level of net-proceeds proposed a debt assumption to avoid the prepayment penalty. The Buyer was a family organization experienced with both affordable and conventional multi-family investing.