Greystone (New York) has closed on the first Freddie Mac Revolving Credit Facility for the senior housing sector. The $150 million Facility provides a competitive interest rate.
Greystone closed the Facility on behalf of Oakmont Senior Living of Chino Hills, Calif., and the first transaction was recently funded under the Facility for $29 million.
“The Facility allows us to finance assets off our construction loans sooner than ever before and we can increase the leverage of the Facility as assets stabilize and then again on the exit refinancing,” says Joe Lin, CFO at Oakmont Senior Living.
The interest-only product provides a floating rate that is indexed to the London Interbank Offered Rate (LIBOR), and allows for up to 75% leverage and an interest-only Debt Service Coverage of 1.50x for independent living and 1.60x for assisted living, at a stressed sizing rate.
Borrowers can continue to borrow against increased values and income created in the properties, up to the maximum amount of the Facility. Given that lending is based on income in place, and to help with transitional assets, the Facility has no minimum requirements for property occupancy. Generally, the minimum size for a Revolving Credit Facility is $50 million, but the Facility can be closed with as little as one asset totaling $10 million or more.
