Enhanced "CI Mezz-Mod Rehab" Product Announced

WASHINGTON, DC - In an effort to address the renovation needs of the nation’s aging multifamily affordable housing stock, RCG Longview, a New York City-based real estate opportunity manager, and Fannie Mae (FNM/NYSE) today announced the availability of the enhanced Community Investments Mezzanine-Moderate Rehabilitation (CI Mezz-Mod Rehab) product. It provides a one-stop financing solution for multifamily properties with moderate to substantial rehabilitation needs by combining a permanent DUS® loan with a mezzanine loan.

The CI Mezz-Mod Rehab product is designed for multifamily properties undergoing renovations with costs of $5,000 or more per unit. DUS lenders provide a one-stop shop by underwriting and providing a rate lock on both the DUS and mezzanine loans. The mezzanine loans are funded by The Community Investment Mezzanine Fund LP, a partnership between RCG Longview and Fannie Mae.
“RCG Longview’s experience providing mezzanine financing coupled with its strong relationships withthe DUS lenders puts us in an excellent position to do even more business through the enhanced CI Mezz-Mod Rehab product,” said David Valger, director at RCG Longview.

According to a 2006 study prepared for the Department of Housing & Urban Development, approximately $1.3 trillion is needed for the rehabilitation of 100 million housing units in the U.S. This includes nearly $600 billion needed for 32 million apartments. However, less than $150 billion is spent each year on rehabilitation of all kinds.

“Fannie Mae has enhanced its CI Mezz-Mod Rehab product to be very competitive and offer a financing solution for the nation’s affordable rental housing stock in need of a serious upgrade,” said Richard Lawch, senior vice president of Community Investments at Fannie Mae.

“CI Mezz-Mod Rehab provides our DUS lenders with an innovative product for rehabilitation and preservation of affordable housing,” added Phil Weber, senior vice president of Multifamily at Fannie Mae. The mezzanine loan minimum is $500,000 and the maximum is $50 million for single assets and up to
$150 million for multiple asset portfolios, and is secured by a pledge of the mezzanine borrowing entity’s ownership interest in the mortgage borrower. The product works in lock-step with Fannie Mae’s DUS Supplemental Loan program which may be used to pay off the mezzanine debt. The mezzanine loans will have a declining prepayment schedule after a one-year lockout period. The prepayment premium schedule starts at just 2 percent and declines by one-half percent per year. CI Mezz-Mod Rehab also offers an amortization schedule of up to 30 years, with interest-only options available.

For more information on the enhanced CI Mezz-Mod Rehab product, log on to efanniemae.com.

Fannie Mae is a shareholder-owned company with a public mission. We exist to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America’s secondary mortgage market to ensure that mortgage bankers and other lenders have enough funds to lend to home buyers at low rates. Our job is to help those who house America.

Since the inception of RCG Longview in 1999, the managers, Peter Cohen and Michael Boxer (Ramius Capital Group, LLC), Jeffrey Feil and Jay Anderson (The Feil Organization), Morton Olshan (Mall Properties), and Jon Estreich (Estreich & Company), have originated more than $1.3 Billion in real estate mezzanine debt and otherrelated instruments through RCG Longview fund vehicles. The investment strategy of the funds is driven by the collective experience of the managers as owners and operators of real estate. RCG Longview thus differentiates itself from its competition by focusing on opportunities where its experience and operational capabilities add additional value beyond financial structuring.

DUS is a registered mark of Fannie Mae. Unauthorized us of this mark is prohibited.