Walker & Dunlop, Inc. announced that it structured $21,900,000 in financing for the acquisition and substantial renovation of an existing 42-unit affordable housing property with an additional four new construction units. The property, Ritch Homes Apartments, is located in Washington, D.C., one of the most high-cost markets in the country.
All of the property’s units were previously subject to a Section 8 HAP contract that was at risk of expiring and threatened this project’s affordability. Together, with the United States Department of Housing and Urban Development (HUD), the D.C. Housing Finance Agency (DHCFA), and Walker & Dunlop, the sponsor, Standard Communities, was able to extend the HAP contract as well as preserve and rehabilitate 46 units of affordable housing for the long term.
Led by Managing Director Chris Rumul, Walker & Dunlop arranged the financing through HUD’s 221(d)(4) Substantial Rehabilitation program. In conjunction with the financing, Standard Communities secured a Four Percent Low-Income Housing Tax Credit (LIHTC) contract through the DCHFA. The rent restrictions associated with the contract will apply to all 46 units. The new LIHTC restrictions will operate under a 15-year initial tax credit compliance period, and is followed by an additional 15-year extended use preservation period, thereby maintaining the property’s affordability through 2050.
Walker & Dunlop’s team guided Standard Communities through the acquisition, helped negotiate multiple tax agreements, and coordinated with several government authorities to ensure compliance with HUD’s loan programs. In addition, to avoid potential issues with the expiring HAP contract, Walker & Dunlop expedited the processing of the transaction, effectively rate locking and closing in just 36 days.
“At Standard Communities, we pride ourselves on connecting our capital with our values. This public-private partnership will expand and preserve the affordable housing at Ritch Homes Apartments, and more importantly, for the Washington, D.C. community that desperately needs more housing like Ritch Homes,” said Scott Alter, Principal and Co-Founder of Standard Communities. “This transaction will provide much needed, high-quality affordable housing for generations,” added Mr. Alter.
“Access to safe and affordable housing was a priority prior to COVID-19, and the pandemic has only exacerbated the need in D.C. Standard Communities is excited to expand our partnership with Walker & Dunlop and the D.C. Housing Finance Agency, which has worked tirelessly to ensure the creation and preservation of affordable housing in this critical time,” said Tommy Attridge, Director of Southeast Production for Standard Communities.
“The District of Columbia Housing Finance Agency (DCHFA) is proud to have joined Walker & Dunlop in financing Ritch Homes Apartments in order to preserve affordable housing in our nation’s capital. This creative transaction will allow 46 families in the District to maintain an affordable cost of living in an area of the city where rents have risen beyond the reach of many residents. Special thanks to our internal deal team for their hard work through the holiday season: Rodney Dew, Underwriter and Brittney Jordan, General Counsel,” stated Christopher E. Donald, Acting Executive Director/CEO, DCHFA.
“This is a critical preservation opportunity where our client is acquiring this property and is completing substantive repairs to maintain this affordable asset. Ritch Homes Apartments is a great example of the varied mission-driven transactions Walker & Dunlop is working on, and we’re proud of our involvement in helping to preserve this project’s affordability component for the foreseeable future,” commented Walker & Dunlop’s Chris Rumul.
Walker & Dunlop is one of the largest multifamily lenders and ranks within the top five affordable lenders in the United States. For more information about Walker & Dunlop’s commitment to corporate responsibility, including our Diversity & Inclusion, affordable housing, and Green Financing initiatives, download our 2020 ESG summary.
About Walker & Dunlop
Walker & Dunlop , headquartered in Bethesda, Maryland, is one of the largest commercial real estate finance companies in the United States. The company provides a comprehensive range of capital solutions for all commercial real estate asset classes, as well as investment sales brokerage services to owners of multifamily properties. Walker & Dunlop is included on the S&P SmallCap 600 Index and was ranked as one of FORTUNE Magazine’s Fastest Growing Companies in 2014, 2017, and 2018. Walker & Dunlop’s 1,000+ professionals in 41 offices across the nation have an unyielding commitment to client satisfaction.