Capital One has provided a $7.7 million Fannie Mae fixed-rate loan to refinance Casa de Flores, a 309-space manufactured home community (MHC) in Chico, California, in the northern Sacramento Valley. Damon Reed, Senior Vice President and Capital One’s Director of MHC Finance, originated the transaction. The sponsor is a repeat customer of both Capital One and Reed. The proceeds of this loan allowed the sponsor to retire existing higher-rate debt and take out cash to complete improvements to the community.
 
Reed and his team helped the sponsor develop a refinance strategy; their existing CMBS loan matured in late 2015, but the defeasance period ended in August. “We recommended that the sponsor execute a forward rate lock in April and close the loan when the prepayment penalty period burned off,” Reed said.  The strategy paid off as the sponsor was able to lock in a low interest rate prior to Treasuries increasing this summer. 
 
Casa de Flores is a well-maintained community offering amenities that include a clubhouse, swimming pool, billiards room, fitness center, laundry facilities, and fenced-in RV storage. Its historic occupancy ranges from 95 to 99 percent.
 
The 10-year fixed-rate loan has 9.5 years of yield maintenance. 
 
Capital One is a leading provider of agency financing for manufactured housing communities. Capital One Bank’s Commercial Real Estate Group offers a comprehensive array of financing solutions for property owners and developers nationwide, including balance sheet and agency lending.