SAN DIEGO – May 9, 2008

CB Richard Ellis announced that Steadfast Villa Nueva LP purchased the 390-unit Villa Nueva Section 8 affordable housing apartment complex in San Diego from Villa Nueva for $41.2 million.

When owners of the property received an unsolicited purchase offer, Kevin Mulhern of CB Richard Ellis’ San Diego Multi-Housing Group and Jim Lampman of CBRE’s HUD Services/Affordable Housing Group in Seattle took on the sales assignment to market the property on behalf of the non-profit owner, Villa Nueva. 

The primary challenge in completing the transaction was overcoming U.S. Department of Housing and Urban Development’s policy restrictions impacting non-profit ownership rights. 

Faced with many affordable properties opting out of the affordable housing program, HUD had recently reinterpreted its mortgage prepayment policy, such that non-profit owners are not allowed to extract equity from a sale. 

To overcome this obstacle, the CBRE team conducted a limited offering to qualified buyers. Given the CBRE HUD Services/Affordable Housing Group’s experience in applying Section 42 Low Income Housing Tax Credits (LIHTC) and its relationship with an extensive network of HUD-qualified and LIHTC-experienced buyers, the CBRE team was able to select an ideal buyer.

The team worked closely with the buyer to appeal the new contradictory policy and obtain congressional clarification of existing housing legislation. 

Notably, Rep. Bob Filner, D-San Diego, discussed approval of the Villa Nueva transaction in the U.S. House of Representatives in a bi-partisan appeal to reverse HUD’s new interpretation of its prepayment and equity release policy. Click here to view U.S. Congressmen Bob Filner and Barney Frank's discussion of Villa Nueva and HUD’s policy change. 

Using tax-exempt bonds, city funding and a 4 percent tax credit, CBRE’s Multi-Housing Group and HUD Services/Affordable Housing Group successfully collaborated to sell the Villa Nueva affordable housing apartment complex resulting in California’s second-largest affordable housing transaction to receive state support through the allocation of tax-exempt bonds since 2006. 

Steadfast Villa Nueva LP represented itself in the transaction. 

Property Address: 3604 Beyer Blvd, San Ysidro, CA 92173