Mark to Market Preservation
First Capital represented the owner of a 100-unit Section 8 Family property located in Pennsylvania in a Mark to Market and Full Mortgage Restructuring under the provisions of HUD’s Mark to Market Program. Section 8 projects, whose mortgages are insured or held by HUD and whose contract rents are above those of comparable market rents of unassisted units, can only renew their Section 8 Contract at market rents. A rent reduction will usually necessitate a restructuring of the existing mortgage. First Capital provided the following services: Prepared and submitted required applications to HUD; reviewed and negotiated the terms of all financial provisions and documents governing the mortgage restructuring; obtained and reviewed all third-party reports; and performed the closing of the transaction. This transaction provided sufficient financial resources for needed capital improvements, additional reserves, increased cash flow, and ultimately preserved 100 units of affordable housing. First Capital minimized the owner’s required contribution and was also able to obtain “Exception Rents” by its superior understanding of the pertinent HUD regulations.
