UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):
September 26, 2019
Steadfast Income REIT, Inc.
(Exact Name of Registrant as Specified in Charter)
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| Maryland | | 000-54674 | | 27-0351641 |
| (State or Other Jurisdiction | | (Commission File Number) | | (IRS Employer |
| of Incorporation) | | | | Identification No.) |
18100 Von Karman Avenue, Suite 500
Irvine, California 92612
(Address of Principal Executive Offices, including Zip Code)
Registrant’s telephone number, including area code: (949) 852-0700
Not applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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| | o | | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| | o | | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| | o | | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| | o | | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None
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| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| N/A | N/A | N/A |
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| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). |
Emerging growth company ¨ | | | |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ |
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| Item 1.01 | Entry Into a Material Definitive Agreement. |
On September 26, 2019 (the “Closing Date”), Steadfast Income REIT, Inc. (the “Company”), through SIR Tapestry, LLC, an indirect wholly-owned subsidiary of the Company (“SIR Tapestry”), refinanced an existing variable rate loan with Newmark Knight Frank (“NKF”) with a new fixed rate Freddie Mac loan in an aggregate principal amount of $48,750,000 (the “Loan”).
The information set forth under Item 2.03 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 1.01.
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| Item 1.02 | Termination of a Definitive Material Agreement. |
On the Closing Date, SIR Tapestry prepaid and terminated the existing mortgage loan with NKF. SIR Tapestry paid no prepayment penalty in connection with the termination of the existing mortgage loan.
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| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The Loan
On the Closing Date, SIR Tapestry executed and delivered a Multifamily Note (the “Note”) and the other Loan Documents (defined below) for the benefit of NKF. The Loan Documents provide for proceeds in the amount of $48,750,000 from a fixed rate loan that accrues interest at 3.66% per annum. The unpaid principal balance on the existing loan was $43,847,811.
The maturity date for the Loan is October 1, 2029 (the “Maturity Date”), unless the Maturity Date is accelerated in accordance with the terms of the Loan Documents. Interest only payments are payable monthly through October 1, 2024, with interest and principal payments due monthly thereafter. Monthly payments are due and payable on the first day of each month, commencing November 1, 2019.
SIR Tapestry may voluntarily prepay all of the unpaid principal balance of the Loan and all accrued interest thereon and other sums due to NKF pursuant to the Loan Documents, provided SIR Tapestry provides NKF with prior notice of such prepayment and pays a prepayment fee, all in accordance with the terms of the Loan Documents.
The Loan is secured by, among other things, the Tapestry Park Apartments pursuant to a Multifamily Mortgage, Assignment of Rents, and Security Agreement (the “Mortgage”). Additionally, pursuant to an Assignment of Management Agreement and Subordination of Management Fees (the “Assignment”), SIR Tapestry has assigned all of its rights under the existing property management agreement to NKF upon an event of default under the Loan Documents. The Loan Documents contain customary covenants and provisions relating to events of default.
The Company entered into a Guaranty (the “Guaranty,” and collectively with the Note, the Mortgage, the Assignment, and the Multifamily Loan and Security Agreement, the “Loan Documents”) to and for the benefit of NKF in connection with the Loan. The Company absolutely, unconditionally and irrevocably guarantees to NKF the full and prompt payment and performance when due of all amounts for which SIR Tapestry is personally liable under the Loan Documents, in addition to all costs and expenses incurred by NKF in enforcing such Guaranty.
SIR Tapestry paid $243,750 in loan origination fees to NKF in connection with the refinancing, and Steadfast Income Advisor, LLC (the “Advisor”) earned a loan coordination fee of $100,000.
The material terms of the Loan Documents described herein are qualified in their entirety by the Loan Documents, copies of which are attached as Exhibit 10.1 to Exhibit 10.5 to this Current Report on Form 8-K and incorporated herein by reference.
On the Closing Date and September 27, 2019, the Company, through the indirect wholly-owned subsidiaries set out in the table below (each a “Borrower” and collectively, the “Borrowers”), refinanced $79,762,799 of existing variable rate loans with NKF and PNC Bank (collectively, the “Lenders”) with new fixed rate Freddie Mac loans in an aggregate principal amount of $83,107,000. Each of the loans has a ten-year term, with interest only payments for the first five years. The Borrowers paid $378,323 in the aggregate in loan origination fees to the Lenders in connection with the refinancings, and the Advisor earned a loan coordination fee of $300,000.
The information contained in this Item 8.01 is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by the specific reference in such filing.
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| Secured Property | | Borrower | | Closing Date | | Lender | | Principal Loan Amount | | Interest Rate | |
| Sycamore Terrace Apartments | | SIR Sycamore Terrace, LLC | | 9/26/2019 | | NKF | | $22,221,000 | | 3.62 | % | |
| Villas at Huffmeister | | SIR Huffmeister Villas, LLC | | 9/27/2019 | | PNC | | $26,392,000 | | 3.56 | % | |
| Villas of Kingwood | | SIR Kingwood Villas, LLC | | 9/27/2019 | | PNC | | $34,494,000 | | 3.56 | % | |
| | | | | | | | | $83,107,000 | | | |
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| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
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| Exhibit | Description |
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| 10.1 | |
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| 10.2 | |
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| 10.3 | |
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| 10.4 | |
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| 10.5 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | | STEADFAST INCOME REIT, INC. |
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| Date: | September 30, 2019 | By: | /s/ Kevin J. Keating |
| | | | Kevin J. Keating |
| | | | Chief Financial Officer and Treasurer |
