Merchants Capital Provides $13M for Rehabilitation of Affordable Seniors Housing Property in Gary, Indiana
GARY, IND. — Merchants Capital has provided more than $13 million in financing for the rehabilitation of the Carolyn Mosby Apartments in Gary. A joint venture between Gorman & Co. and the Gary Housing Authority (GHA) was the borrower. GHA built the property in the late 1960s as a public housing development. The eight-story building comprises 142 units that are reserved for seniors or disabled residents earning 30 to 60 percent of the area median income.
The financing will preserve the affordability of the property for its residents. The project received an allocation of $13 million in tax-exempt bonds from the Indiana Housing & Community Development Authority, enabling GHA to partner with Gorman to convert the property from public housing to a long-term Section 8 Housing Assistance Payments contract.
Merchants Capital facilitated the bond purchase in the form of a $13 million construction loan from Merchants Bank of Indiana. Following construction completion, the loan will convert to a $5.2 million permanent loan pursuant to a Freddie Mac tax-exempt loan forward commitment, to be serviced by Merchants Capital. The project also received equity investments totaling roughly $9.7 million in return for federal low-income housing tax credits and federal historic rehabilitation tax credits.
Carolyn Mosby Apartments will undergo both interior and exterior improvements, including updates to all electrical and plumbing fixtures to improve the energy efficiency and water usage throughout the property. Common areas will be upgraded on each floor. Completion is slated for 2024.