Brownstone Gardens Apartments I and II

$9.4 million HUD Section 223(f) refinance for Brownstone Gardens Apartments I and II, East Longmeadow, MA.

Brownstone Gardens Apartments is a 132-unit mixed-income development originally constructed in two phases. The first phase containing 100 units was completed in 1975 via a 13A mortgage, while the second phase containing 32 units was completed in 1985 via a HUD Section 202 loan.

The property is designated exclusively for elderly and disabled tenants. Brownstone Gardens receives rental assistance from a HUD 20-year Project-Based Section 8 Contract covering 32 units that had a remaining term of 8 years. An additional 25 units receive rental assistance from the Massachusetts Rental Voucher Program through a contract with the East Longmeadow Housing Authority and the Department of Housing and Community Development. A further 50 units are reserved for tenants whose income does not exceed 80% of the Areas Median Income while 25 units are unrestricted. 

As part of the transaction, the owners and HUD agreed to terminate the Project-Based Section 8 Contract and enter into a new 20-year Project-Based Section 8 Contract. Upon expiration of the new 20-year Contract, the owners have agreed to further extend the Contract an additional 8-years, the time-period remaining on the prior Section 8 Contract. As a result, the 32-units covered under the Section 8 Contract will have affordability extended through 2051.

Proceeds of this Section 223(f) loan were used, in part, to pay-off a construction loan that Brookline Bank provided to the owners of Brownstone Gardens that enabled approximately $8 million in renovations, including equipping all of the buildings on the property with elevators. The new loan provides ownership with a stabilizing 35-year, fully amortizing, fixed interest rate loan. In addition, the loan will allow for further renovations at Brownstone Gardens, providing five fully accessible units at the property.