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PWF takes advantage of Fannie Mae.

PW Funding Inc., a subsidiary of CharterMac, announced that it has provided $44.9 million in mortgage financing for two garden apartment complexes on the south shore of Long Island.

With 2.8 million people packed into Long Island's scant 1,200 square miles, and single-family home prices averaging between $410,000 and $560,000, there is a growing need for apartment housing in the area. Long Island's apartment market continues to be one of the most desirable in the country for multifamily housing. Investment in multifamily properties in this region is a solid option; rental housing is in short supply and demand is high, with multifamily units representing only 11% to 12% of the housing units in the market, with an average occupancy of 95% or better.

The first of the two properties financed by PWF, Hawthorne Court/ Hawthorne Estates is a 434-unit complex in Central Islip that consists of studio, one- and two-bedroom flat-style units, as well as townhouse-style units, in two distinct phases. The first section of the property, Hawthorne Court, was originally constructed in the 1960s, and the second, Hawthorne Estates in 1999. Unit amenities at the complex include full appliance packages. The property features a swimming pool and laundry facilities. Home Properties acquired Hawthorne Court/Hawthorne Estates in 2002, and has since completed major renovations on the property, including the complete rehabilitation of 79% of the units, as well as the complete residing of all of the buildings and the replacement of all roofs.

PWF structured the $38.437 million financing on Hawthorne Court/ Hawthorne Estates with Fannie Mae's DUS discount mortgage-backed securities product. According to Neil Cullen, managing director and national sales manager of PWF, "The benefit of Fannie Mae's DUS DMBS product is that it enables our best customers to benefit from the very low interest rates on the short end of the yield curve. In the case of the Hawthorne financing, initial pay rate for the first 90-day security is in the low 2% range." Subsequent DMBS securities will be sold every three months to set the subsequent pay rates. Home Properties elected to go with a ten-year loan term with 30-year amortization. The loan on Hawthorne Court/ Hawthorne Estates is convertible to fixed-rate at any DMBS rollover date.

The second property, Heritage Square Apartments, is an 80-unit complex in East Meadow that consists of studio, one-and two-bedroom units in one two-story building. The property was originally constructed in 1951 and underwent extensive renovations when it was acquired by Home Properties in 2002. Renovations at the property included the complete rehabilitation of 46% of the units, as well as upgrades to individual unit appliances; flooring, bathrooms, kitchens, common laundry areas and leasing office equipment. Renovation of the remaining units is ongoing.

PWF funded the $6.52 million loan on Heritage Square Apartments with Fannie Mae's DUS loan product.

The loan has a 5.15% interest rate. Both the Hawthorne Court/ Hawthorne Estates and Heritage Square Apartments loans were originated by PWF's New Jersey office origination staff.
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Title Annotation:Finance: real estate
Publication:Real Estate Weekly
Geographic Code:1USA
Date:Aug 18, 2004
Previous Article:Wells Real Estate Funds completes $680M buying spree.
Next Article:Short-term mortgage lender sets a $65M deal record in 04.

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