Centerline Holding Co., a New York apartment finance company, said last week that it had originated what it believes is the first construction loan of its kind to supplement a first-lien Fannie Mae mortgage.
The $1 million loan, which closed late last month, is to finance 22 more apartments in Windmere at Tall Grass, a 204-unit complex in Wichita, Kan.
Two years ago Centerline arranged the $8.9 million first mortgage from Fannie on the property, and it said the borrowers "came back … with a request to investigate allowing a supplemental loan for the construction of additional units on the site. The borrowers originally wanted to draw upon an unsecured construction loan, but bank financing was not available."
Bryan Cullen, a senior vice president in Centerline's Washington office, said last Thursday that the existing units back the supplemental loan "so the construction of the new units is at the borrower's discretion."
Centerline said it got Fannie to sign off on new construction at the site before securing the second loan from the government-sponsored enterprise. "This is the first time to Centerline's knowledge this type of transaction has been accomplished with a Fannie Mae first mortgage," the lender said.