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DC affordable housing preservation project gets $21.9M in Walker & Dunlop financing

Bethesda-based commercial real estate finance company Walker & Dunlop Inc. Wednesday announced it structured $21.9 million in financing for the acquisition and substantial renovation of an existing 42-unit affordable housing property in Washington with an additional four new construction units.

The property, Ritch Homes Apartments, is 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.

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