The Property was completely renovated in 2015 to meet all requirements for sophomore housing under the University’s Second-year Transformational Experience Program (“STEP”). In order to fund the renovations, the Corporation raised approximately $1.8 million in alumni donations and borrowed $2.4 million from Citizens National Bank of Bluffton (“Citizens”). The outstanding principal balance on the loan is approximately $1.5 million. The current interest rate is 5.15%. A balloon payment in the amount of approximately $1.6 million is due October 9, 2024. It appears unlikely that House Corporation will be able to refinance with a commercial lender. 

The Investment Company is proposing to make a five-year loan to House Corporation.  House Corporation will be obligated to repay the loan, with interest. The Board of the Investment Company can decide, at the end of the loan term, whether to extend the loan or terminate the debtor-creditor relationship.  Moreover, the Investment Company may foreclose on the property if House Corporation fails to make loan payments when due; fails to keep the property in good repair; fails to maintain acceptable occupancy levels; or otherwise fails to meet its obligations to the Investment Company.  The objectives of the Investment Company and its principals include:  (a) avoiding foreclosure of the Citizens mortgage loan and sale of the chapter house; (b) encouraging growth of the undergraduate chapter; and (c) encouraging House Corporation to maximize rental income from the property and operate in a fiscally-responsible and sustainable manner.  

If you have questions, or are interested in participating, please contact Greg Flax, gflax@martinbrowne.com, (937) 459-2381 or Kent Walker, ksta12@yahoo.com, (937) 283-5079.  Please consult your own attorney and/or financial advisor for investment advice.