DEPARTMENT: Department of Planning and Community Development
DEPARTMENT HEAD: John M. Dugan
COUNCIL DISTRICTS IMPACTED: District 5
SUBJECT: Conversion of Multifamily Housing Revenue Bonds to a fixed rate for the Cevallos Lofts Apartment project
SUMMARY:
Authorizing the San Antonio Housing Trust Finance Corporation to convert the variable rate demand Multifamily Housing Revenue Bonds, Series 2010, to a fixed rate and authorizing a subordinate taxable fixed rate loan to pay deferred developer fees for the Cevallos Lofts Apartment project.
BACKGROUND INFORMATION:
The Cevallos Lofts Apartments development, located at 1314 South Flores, is a multi-family apartment community comprising of 252 one and two bedroom apartments of which 63 units are for tenants with approximate incomes up to 50% of the area's median income and 189 market rate units.
On March 18, 2010, through ordinance 2010-03-18-0219, City Council approved of the San Antonio Housing Finance Corporation bond issuance for the Cevallos Lofts Apartments project and participation in the transaction by the San Antonio Housing Trust Public Facility Corporation. The City provided $3.6 million in HOME and Neighborhood Stabilization Program (NSP) funds for gap financing to the project.
On June 10, 2014, SAHT Finance Corporation approved a resolution authorizing the conversion of the SAHT Finance Corporation variable rate demand Multifamily Housing Revenue Bonds, Series 2010 to a fixed rate.
ISSUE:
Cevallos Lofts, Ltd. partnership is seeking to take advantage of the low interest rate environment to switch from an underlying variable rate tax-exempt bond structure to a fixed rate bond structure. In doing so, the partnership will benefit from the removal of approximately 160 basis points of floating-rate associated fees, allowing an all-in fixed rate to be set 50 to 60 basis points below the current rate structure and locked in for the next fifteen (15) years. It i...
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