In a market largely bereft of real estate deals, federal stimulus programs and funds are creating work for dirt lawyers—and tax and bond counsel, too.

Althea J.K. Broughton at Arnall Golden Gregory is one of those lawyers. Her team recently closed two multifamily affordable housing transactions, one in the City of Decatur, the other in Union City. Both deals involved a complex mix of funding sources and took more than a year to complete.

The $5.8 million Decatur project, called Allen Wilson Phase I, will be located in downtown Decatur at Robin Street, Electric Avenue and Commerce Drive. Broughton, along with Arnall lawyers Alison M. Drummond, James T. Rauschenberger and A. Rian Perry, represented the Decatur Housing Authority and two affiliates to negotiate financing for the city’s first mixed-finance transaction of this type. The housing authority’s general counsel, Alan E. Rauber of McCurdy & Candler, also was involved.

“I think this deal is somewhat unusual,” Broughton said. “Typically, first of all, there are not very many bond deals that are closing in this environment, so when I say unusual, I mean that. Also, this was not your typical bond deal with an issuer and an indenture and a trustee. This was a little bit different in that you had the housing authority issuing notes that were purchased by Fannie Mae as part of a tax-exempt execution.”

Broughton said she helped her client get various approvals from the Department of Housing and Urban Development, which requires them in mixed-finance transactions. She said the tax-exempt bonds required HUD approval because the Decatur Housing Authority was essentially borrowing against a future stream of funds from HUD, then using those rights as collateral on a tax-exempt loan from Fannie Mae. The lawyers also got HUD approval for the receipt of stimulus funds under the American Recovery and Reinvestment Act, or ARRA.

Caryl Greenberg Smith of Hunton & Williams, who served as bond counsel on both the Decatur and Union City deals, said that Fannie Mae is trying to promote affordable housing by purchasing notes directly rather than having the housing authority market the notes publicly. Such deals, she said, can offer a “huge, huge reduction in the interest rate compared to what you would have gotten in the market.”

The bond aspect of the Decatur deal also yielded 4 percent housing tax credits from the Georgia Department of Community Affairs, Broughton said, which were then sold to equity investor Peachtree Investment Solutions, LLC, represented by Aaron J. Kowan at Taylor English.

Kowan said his client invested about $2 million, but that the deal’s sophistication and complexity was on par with $30 million projects. “For the size of the deal, it was probably the most complicated deal I ever worked on. I wish I’d known that before I took the deal,” he said, and laughed. “I was working on a flat fee.”

Kowan, a tax lawyer who worked on the transaction with associate Brandon C. Hardy, said the deal was complex because it involved three to four levels of debt, each with unusual business and tax issues related to the public-private partnership, and unusual guaranty provisions related to HUD backing.

In the Union City deal, Broughton’s team represented Ambling Development Partners, which plans to build a 150-unit elderly housing complex known as Woodbridge at Parkway Village at the intersection of Southwood Road and Thompson Road.

Broughton said this deal, worth $16 million, included ARRA stimulus funds through HUD and bonds which were credit-enhanced by the Federal Housing Administration to make them more marketable. The bonds, which are tax-exempt and yield a 4 percent tax credit, were purchased by equity investor Community Affordable Housing Corporation, represented by Robert G. Coberly from Bryan Cave’s Washington office.

Broughton said stimulus funding was crucial to both deals, and is providing a boost to real estate work in general. “I really think the stimulus funds have actually helped save some deals or made some deals viable and have gotten them to closing,” she said. “Initially we all had to figure out how those funds would work, but I think they’ve promoted a lot of development activity.”