ValueXpress obtained a $5.6-million Fannie Mae loan approval from its Fannie Mae partner to refinance a 141-unit Class B apartment portfolio consisting of nine two- and three-story apartment buildings locations in the Ocean View section of Norfolk, VA. The properties are impeccably maintained by a local apartment investor and are well known in the community; they sport distinctive “beach pastel” exterior colors and funky names, such as Surfrider Apartments. Many of the units face the beach and are favorites of military and student renters in the market. The properties are 98% occupied, and luckily, they weathered Hurricane Sandy without significant damage.
“Despite the excellent operating performance of the portfolio, it provided significant underwriting work to get this loan processed,” said Jim Brett, chief underwriter at ValueXpress. “First, we had to obtain a waiver from Fannie Mae because the properties are non-contiguous. Once we cleared that issue, Fannie Mae indicated the cash flows for all nine properties for the prior 3 years and trailing 12 months had to be “rolled up” into a combined cash flow. The borrower’s existing accounting software could not do it, but we were able to export the data into a QuickBooks accounting program, restore the data and export it into an Excel workbook. We rolled up 36 worksheets in an effort that took 20 hours to complete.”
The borrower was very happy that ValueXpress was willing to complete the accounting conversion to allow the transaction to move forward with Fannie Mae, which will provide a very attractive rate and cash-out proceeds that would not have been achieved in an alternative apartment loan program.