Tax Exempt Bond Financing
Red Stone is an innovative and leading lender to the multi-family affordable housing industry throughout the United States. We focus on providing acquisition, development period and permanent mortgage capital on properties that are financed utilizing tax-exempt and taxable bonds. Since its founding in 2002, Red Stone had provided in excess of $4.0 billion of mortgage capital on affordable and mixed income rental properties.
Red Stone’s primary lending program, RedStone Direct, is a Direct Purchase Bond Program under which we offer developers/owners of affordable rental housing a streamlined tax-exempt and taxable financing execution featuring low transaction costs, flexible underwriting, speed and certainty of closing and competitive pricing.
Key Attributes of Red Stone Direct
Streamlined Bond Execution
Red Stone underwrites and structures its bonds directly with its borrowers and purchases those bonds on nonrated basis into its own sponsored investment funds. RedStone Direct eliminates the extensive processes associated with mortgage banking/credit enhancement, bond rating and the marketing and public sale of bonds.
Low Transaction Costs
Through eliminating costs of mortgage banking/credit enhancement, bond rating and the marketing and public sale of bonds, the transaction costs of a Red Stone financing will typically be one-third to one-half of those associated with credit enhanced and publically marketed bond transaction.
Simplified and Lower Risk Financing Structure
RedStone Direct embeds both development period and permanent lending into its financing. There is no separate construction lender or “forward” takeout provider. “Conversion” risk is eliminated under Red Stone’s program. Red Stone also locks its interest rate upon the execution of a term sheet.
As a direct buyer of tax-exempt and taxable bonds, Red Stone is able to offer more customized and flexible loans structures as compared to the competitive marketplace. The extensive experience of our firm and its principals in the affordable housing industry, allows Red Stone to underwrite development and permanent financing on a pro forma rather historical basis.
Speed and Certainty of Closing
Red Stone can underwrite and commit to transactions within 30 days. Red Stone typically structures and closes tax-exempt bond transaction with a 60 to 90 day time-frame.
Other Red Stone Transaction Activities:
The Red Stone Bridge platform facilitates the acquisition financing needed to buy an affordable housing property intended to be preserved utilizing the issuance of tax-exempt bonds and “4% LIHTC” equity across the United States. Red Stone is proud to offer below-market transaction costs, above-market loan proceeds, a streamlined closing process, and certainty of execution.
Joint Venture Equity and Other Credit Support
Red Stone also provides joint venture equity and credit support to developers and owners of affordable rental housing. These transactions are structured on a case-by-case basis.
Secondary Market Purchases
Red Stone periodically purchases existing tax-exempt housing bonds on the secondary market when these opportunities meet the investment objective of our investment partners.