REVEN HOUSING REIT, INC. (NASDAQ:RVEN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On February 11, 2019, Reven Housing Funding 2, LLC (“Borrower”), a Delaware limited liability company and a wholly-owned subsidiary of Reven Housing REIT, Inc., a Maryland corporation (“Reven”), entered into a Loan Agreement with Arbor Agency Lending, LLC (“Lender”), an approved Seller/Servicer for Federal Home Loan Mortgage Corporation (Freddie Mac). The Loan Agreement provides for a loan (“Loan”) to the Borrower in the original principal amount of $10,523,000.00. The Loan is a seven-year, interest-only payable Loan with principal due and payable at its seven-year maturity, and accruing interest at a fixed rate of 4.72% per annum. The Loan is secured by 143 of Reven’s single family homes. Proceeds of approximately $2.9 million were utilized to purchase 12 homes in Oklahoma City, Oklahoma. Additionally, as a result of the Loan, Reven received approximately $7.4 million of Loan proceeds, net of transaction fees and the purchase of homes noted above, which Reven intends to use for future acquisitions of single family homes.
The Loan Agreement and related loan documents evidencing, governing and/or securing the Loan (collectively, the “Loan Documents”) contain customary terms and conditions, including, without limitation, customary events of default and remedies of the Lender.
Additionally, in connection with the Loan, Reven entered into that certain Guaranty, dated February 11, 2019, with Lender (the “Guaranty”). The Guaranty provides that if Borrower were to default under the Loan Documents and such default remained uncured after any applicable notice and cure period under the Loan Documents had expired, then Reven would be liable for the repayment of the Loan up to $2,630,750.00, plus any additional amounts Borrower had personal liability for to the terms and provisions of the Loan Agreement.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Oklahoma City 45
On February 11, 2019, Reven Housing Funding 2, LLC (“Reven Funding”), a Delaware limited liability company wholly-owned by the Company, closed on its purchase of the final 12 single family homes in the Oklahoma City, Oklahoma metropolitan area to a Single Family Homes Real Estate Purchase and Sale Agreement with A Holdings, LLC, WRG Investments, LLC, Foster Investments, LLC, and Lone Oak Run Investment Holdings, LLC (collectively, the “Sellers”). The Sellers are unaffiliated with Reven Funding.
The contract purchase price for the 12 acquired properties was approximately $2,893,478, exclusive of closing costs. Reven Funding funded the purchase with the proceeds of the loan described in Item 1.01 above.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information reported under Item 1.01 above regarding the description of the Loan and the material terms and conditions related thereto is incorporated herein by reference.
About REVEN HOUSING REIT, INC. (NASDAQ:RVEN)
Reven Housing REIT, Inc. is a holding company. The Company is an internally managed real estate investment trust. It is engaged in the acquisition, ownership and operation of portfolios of leased single family homes in the United States. Its objective is to generate cash flow and distribute resulting profits to its stockholders in the form of distributions, while gaining home price appreciation at the same time through the ownership of its portfolio properties. It operates its portfolio properties as single family rentals (SFRs), and generates its revenue from rental income from the existing tenants of the SFRs. As of December 31, 2015, it owned a total of 527 homes, of which 256 homes were in the Jacksonville, Florida metropolitan area; 168 homes were in the Houston, Texas metropolitan area; 94 homes were in the Memphis, Tennessee metropolitan area (with two of the Memphis homes located across the border in Mississippi), and nine homes were in the Atlanta, Georgia metropolitan area.
