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We have worked on several Section 8 11(b) financings with the Newark Housing Authority through its 11(b) corporation, the Newark Housing Finance Corporation. A specific example is the $17,665,000 St. Mary’s Villa Project. The Property was owned and managed by a private entity and the underlying mortgage was FHA insured.
The refunding was accomplished using a structure consisting of Senior Bonds in the amount of $17,450,000, which were AAA rated, and Junior Bonds in the amount of $250,000, which were unrated. The junior lien bonds were marketed to sophisticated institutional investors in a private placement. The Authority obtained significant savings from this refunding which it will use to fund new housing initiatives.
On January 28, 2000 two 1998 Demonstration Projects in Newark, NJ closed on their restructured FHA-insured mortgages which were financed with tax exempt debt in order to access the equity generated by 4% LIHTC. NW Financial served as Financial Advisor to the Newark Housing Authority for theses refinancings. Our responsibilities included review of all of the documents relating to the financing, such as the restructuring agreements and FHA mortgage documents issued by HUD, as well as review of the cash flows and pro formas relating to the bond financing. Our background and knowledge of the Section 8 program and the Demonstration regulations helped to assure an effective restructuring of these two projects.