Killeen, TX; 240 Units, Market Rate Apartments
This facility was built in 2007 but, due to the credit crunch, the existing construction lender was unwilling to extend a permanent loan. Rockhall accepted the assignment.
Rockhall needed to obtain a waiver of the three-year rule that limits FHA refinances of conventionally-financed properties within three years of completion. An additional challenge associated with this transaction is that the project specifically catered to service personnel posted at Fort Hood. The leases needed to be flexible to accommodate troop deployments.
Rockhall was able to structure a HUD-approved lease that allowed unrelated service personnel to share an apartment. The FHA-insured loan paid off the construction loan and funded reserves. Subsequent to the initial financing, interest rates continued to fall and, by 2012, Rockhall was able to use FHA’s streamlined refinance program to lower the 35-year fixed rate interest rate to 3.1%. Because FHA’s streamlined finance program does not require an appraisal or environmental report and, only in limited cases requires a physical needs assessment, processing was quick and inexpensive.