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From Affordable Housing Finance

KeyBank Real Estate Capital (KBREC) has arranged a $43.8 million construction loan and permanent financing for the ground-up development of The Reserves at San Marcos, a 376-unit property in Texas.

The developer is Target Builders based in Carrollton, Texas.

KBREC’s Community Development Lending and Investment (CDLI) team purchased the private-activity tax-exempt bonds as part of the funding structure, and KBREC’s Commercial Mortgage Group secured $43.8 million of permanent loan financing via Freddie Mac that includes a $41 million tax-exempt loan and a $2.8 million taxable tail, both of which are fixed-rate loan structures. The forward-commitment period is 36 months, and upon successful conversion, the permanent loan term will be 15 years with a 35-year amortization schedule.

CREA syndicated the 4% low-income housing tax credits.

Set on 21 acres of land in San Marcos, the development will include 298 affordable units reserved for residents earning up to 60% of the area median income. The rest of the units are intended to be market rate, and 28 units will be accessible to disabled residents. Apartments will be available in one-, two-, three- and four-bedroom configurations, ranging in size from 650 to 1,350 square feet.

Robbie Lynn of KBREC’s Commercial Mortgage Group and Hector Zuniga of the CDLI team structured the financing.

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