June 27, 2022 – Ginosko Development Company (GDC), L+M Development Partners (L+M) and CPC Mortgage Company, a subsidiary of The Community Preservation Corporation, announced the closing of a $105.7 million transaction to acquire and preserve a portfolio of affordable rental buildings totaling 1,370 units. CPC Mortgage Company is providing Freddie Mac first mortgage financing as well as subordinate debt to assist in the acquisition. The partnership between GDC and L+M will help preserve the long-term affordability and quality of the properties which are located in the cities of Detroit, Saginaw, Walker, Center Line, Monroe, Canton, and Pontiac.
“Here you had a minority development company with the creativity and know-how to structure this portfolio located in its own ‘backyard’, coupled with the additional financial wherewithal and collective genius of L+M, CPC, and Merchants; I truly do believe these deals reflect the heart of economic and collaborative equality. Everyone has been an absolute pleasure to work with,” said Amin Irving, Founder, President, and CEO of GDC.
“As a mission-based lender, our goal is always to work with high quality sponsors who are focused on preserving and expanding access to affordable housing. GDC, L+M, and this portfolio aligned seamlessly with both of these goals. We’re proud that our unique ability to package a Freddie Mac first mortgage with CPC subordinate debt will allow Ginosko and L+M to move forward with their plans to revitalize these properties and improve housing quality and living conditions for their tenants,” said John Cannon, President, CPC Mortgage Company.
“At L+M, our mission is centered around ensuring communities have access to safe, high quality, affordable housing and we’re proud to extend this commitment to our Michigan portfolio,” said Jeffrey Moelis, Managing Director at L+M Development Partners. “Preserving our nation’s affordable housing stock has never been more important and as we work to rehabilitate each site, residents will not only receive improved living environments but will also be assured that their homes will remain affordable. We thank our financing partners for helping us advance this plan and look forward to working alongside Ginosko to breathe new life into each of these nine properties.”
“At CPC Mortgage Company, we are always working to distinguish ourselves from other lenders. We were happy to develop a unique financing structure that allowed us to put subordinate debt behind a Freddie Mac first mortgage. This was made possible by the sponsors’ dedication to improve the asset quality after acquisition while simultaneously preserving affordability,” said Steve Getz, Vice President, Head of Agency Production at CPC Mortgage Company.
This acquisition underscores the commitment of the GDC, L+M and CPC Mortgage Company to address the affordable housing needs of underserved communities, as well as the long-term preservation of affordability for low- and moderate-income tenants. All of the properties are affordable at 60% of Area Median Income or below, with six of the properties benefiting from Housing Assistance Program (HAP) contracts. In addition to preserving affordability, the portfolio will undergo moderate rehabilitation to address its long-term maintenance needs, so that it continues to provide quality housing to its tenants.
CPC Mortgage Company is providing a total of $58.3 million in first mortgage financing through Freddie Mac’s Targeted Affordable Housing product on four of the properties, along with $8.1 million of CPC subordinate debt. As a nonprofit Freddie Mac seller/servicer, CPC Mortgage Company has the unique ability to provide subordinate financing behind Freddie Mac first mortgages to support affordable housing preservation.
CPC Mortgage Company is also providing a total of approximately $39.3 million in financing through Freddie Mac’s Targeted Affordable Housing product for the remaining three properties.
GDC is one of the awardees of Citi’s Emerging Manager Fund, an initiative aimed at preserving affordable housing while expanding opportunities for diverse developers. A portion of the proceeds of this funding will allow GDC to complete the sources necessary to fully capitalize the acquisition.
The subject properties are:
- Detroit, MI: 350 rental units
- Saginaw, MI: 120 rental units
- Walker, MI: 100 rental units
- Center Line, MI: 252 rental units
- Monroe, MI: 200 rental units
- Canton, MI: 147 rental units
- Pontiac, MI: 201 rental units
# # #
About CPC Mortgage Company LLC
CPC Mortgage Company LLC is a full-service Agency lender offering a suite of Freddie Mac, Fannie Mae, and Federal Housing Administration (FHA) products. Our scope includes conventional, affordable, and small balance lending for the acquisition, refinance, rehabilitation and construction of multifamily housing. CPC Mortgage Company LLC is a subsidiary of The Community Preservation Corporation (CPC), an S&P AA- rated, nonprofit multifamily finance company that has delivered more than $12 billion to finance more than 220,000 units of affordable and workforce housing. Revenue generated by CPC Mortgage Company LLC supports the mission of CPC, allowing it to have a greater impact with its investments in housing and community development. Visit us at communityp.com/mortgagecompany
About Ginosko Development Company
Ginosko Development Company (GDC) is a real estate development company specializing in quality affordable housing creation and preservation. Founded in 2002, GDC began by recognizing the growing demands of establishing and preserving safe, quality residences for the full spectrum of socio-economic households. GDC develops, acquires, repositions and manages affordable multifamily properties in the United States, primarily in the Midwestern region. Ginosko Development Company’s 20 years of affordable housing experience has identified and created unique strategies to increase net distributable proceeds to owners/investors and decrease the housing cost burden to renters, especially low-income renters.
About L+M Development Partners
At L+M Development Partners, working together to build stronger communities is our mission. Our double bottom line philosophy means that we measure success not only in financial returns but also by the positive impacts we make in the communities we serve. Founded in 1984, L+M is a full-service real estate development firm which develops, invests, constructs and manages properties with industry-leading innovation. Most recently ranked #17 on Affordable Housing Finance’s Top 50 Developers list nationally, L+M and its affiliate companies are responsible for over $10 billion in development and investment and have acquired, built, or preserved nearly 40,000 high-quality residential units in a variety of urban markets nationwide, primarily in New York’s tristate area.