GMAC Commercial Mortgage Corporation Arranges a $35,920,000 Bond Issue for a Group Home Portfolio

Business Wire, Nov 11, 2004

WASHINGTON -- GMAC Commercial Mortgage Corporation (GMACCM) has provided $35,920,000 in permanent, fixed-rate refinancing for a multifamily portfolio consisting of 179 group homes, which provide housing for people with developmental disabilities.

The portfolio contains a total of 1,019 units in 167 properties with five and six bedrooms, and 12 apartment buildings with eight to 10 units. The properties are located in 87 counties throughout North Carolina and were constructed in the early 1980's. All rents are subsidized by HUD under Section 8 Housing Assistance Payments Contracts.

This transaction was a tax-exempt municipal housing revenue bond, issued by GMAC Commercial Holding Capital Markets Corp. The bond issue proceeds prepaid the original loans to the federal government, funded a $3.8 million capital improvement budget, funded substantial reserves and paid all costs. No equity was contributed, however reserves under the original loans were released upon prepayment and used to augment the renovation budget for the properties and further supplement ongoing reserves. The bonds were rated by Moody's Investor Service at Baa1 - the highest rating ever granted for this type of financing. The transaction brought the projects under a single mortgage and note with a term of 30 years. The mortgages are all cross-collateralized.

Under this structure, approximately $700,000 a year in annual debt service savings will be realized at the refunding bond average coupon fixed rate of 5.43 percent, a record low for this type of financing. Those debt service savings will be used to fund future programs and services for the residents of the properties. These programs and services otherwise would not have been available or would have required federal grants.

The original financing was a direct loan from the U.S. Treasury under HUD Federal Statute, Section 202. The average interest rate on the original loans exceeded 8.75 percent, and each property had its own original mortgage with a term of 40 years.

GMACCM Vice President Richard Price of the Washington, D.C., loan origination office arranged the transaction, and The Arc of North Carolina received the funding. Price commented, "This is the third in a series of transactions of this type completed by this methodology. Refinancing of HUD Section 202 projects is a very new program, just recently authorized by HUD. In a short time period GMACCM and its affiliates have emerged as the leaders in the field."

GMAC Commercial Mortgage Corporation (GMACCM), a wholly-owned subsidiary of GMAC Commercial Holding Corp., is a premier financial services firm with extensive funding sources that, coupled with a broad menu of innovative financing programs, serve the needs of borrowers of commercial real estate debt as well as the providers of such capital. GMACCM is an industry leader in loan origination, servicing, asset management, investment management and technology services. The diverse lending and servicing specialist and its affiliates have more than 100 offices worldwide. GMACCM has a servicing portfolio of more than $240 billion and provides a variety of financing products and services including permanent, interim, mezzanine and construction lending as well as equity capital for commercial real estate. GMACCM has specialized lending units focused on healthcare, hospitality and franchise and asset backed lending.

GMAC Commercial Holding Capital Markets Corp., a NASD broker/dealer, began operations in 1979 to concentrate on all aspects of real estate finance, and in 1983 GMAC Commercial Holding Capital Corp. was formed to complement GMAC Commercial Holding Capital Markets Corp.'s operations. The companies are based in Denver and have offices in Seattle; San Diego, San Francisco, Thousand Oaks, Santa Monica, Manhattan Beach and Pasadena, Calif.; Houston; New Orleans; Chicago; New York; Washington, D.C.; Horsham, Pa.; Nashville, Tenn; and Boca Raton, Fla.

News releases and other information about GMACCM, its products and services are available at www.gmaccm.com.