Freddie Mac mezzanine deal funds first multifamily loan
Freddie Mac bought a $47 million multifamily mortgage using its new mezzanine finance arrangement. Freddie said it acquired a first mortgage from M&T Capital Realty Corp. for a property in suburban Washington. The property is a 397-unit affordable apartment community in Camp Springs, Md., that was built in 2007. Property declines related to the economic downturn made refinancing difficult. Under the deal, the borrower, Metropolitan Apartments at Camp Springs, secured a mezzanine loan for $6.75 million from Berkshire Properties. Berkshire was happy to be the first lender under Freddie’s new mezzanine arrangement, said Eric Draeger, vice president of Berkshire Property Advisors. "It’s exciting that Berkshire is part of a solution that meets a unique financing need in the marketplace," he said. Dan Brendes, vice president, M&T Realty Capital, said the borrower has a loan-to-value ratio just above the standard requirements of 80%. Mezzanine financing was needed to address the borrowers’ need for additional financing and to address a pending loan maturity. Freddie Mac has partnered with Berkshire Properties, Carmel Partners, Essex Property Trust and Waterton Capital Solutions, to provide mezzanine financing for senior mortgages that the government-sponsored enterprise purchases from lenders. Write to Kerry Curry.