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Rockport Mortgage Corporation (RMC) has built its reputation on
superior service in the completion of financial transactions for
its customers and partners. To further enhance the value RMC creates
for its clients through financing services, RMC now provides strategic
consulting services to develop, implement and close all aspects
of HUD-assisted preservation transactions. Through RMC's Consulting
Services, clients will now have an edge in navigating the complexities
involved in recapitalizing older HUD assisted and insured Multifamily
properties. These services have proven to provide significant financial
and strategic benefits to property owners.
The vast majority of HUD's privately-owned affordable housing stock
was built between the late 1960s and early 1980s under the following
FHA insurance and mortgage subsidy programs;
· Section 221(d)(3) Below-Market Interest Rate Program;
· 221(d)(3) Market Rate Program;
· Section 236 Interest Reduction Payments Program;
· Section 221(d)(4) Market Rate Program; and
· Section 202 Elderly Housing Direct Loan Program.
HUD frequently provided owners of these properties with additional
project-based assistance to ensure the affordability of these apartments
to very-low and low- income households in the form of:
· Rent Supplement Assistance;
· New Construction/Substantial Rehabilitation Section 8 Rental
Assistance; and
· Loan Management Set-Aside Section 8 Assistance
Given the age of these properties and expiring subsidies, recapitalization
is needed to address capital improvement needs of the property and
financial concerns of their owners.
The Need for Recapitalization
Properties developed under HUD-assisted and insured programs were
very effective in meeting the affordable housing needs of millions
of households, however most now need to be recapitalized due to
both the declining physical condition of the properties and serious
financial concerns of owners. These properties are anywhere from
25-35 years old, resulting in the need for a capital infusion to
complete some level of rehabilitation. In the case of for-profit
owners, most tax benefits derived from the properties have been
exhausted and cash distribution limits that were established at
mortgage inception are insufficient to meet the needs of today's
investors. Fortunately, HUD recognizes the need to preserve this
dwindling affordable housing stock and continues to develop programs
to address the needs of properties and their owners.
RMC Qualifications: Linda Pellegrino
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