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May 4, 2026
The Honorable Phil Mendelson, Chairman
Council of the District of Columbia
1350 Pennsylvania Avenue, N.W., Suite 402
Washington, DC 20004
Dear Chairman Mendelson:
Pursuant to D.C. Official Code § 42-2702.07, and on behalf of the Board of Directors (the
“Board”) of the District of Columbia Housing Finance Agency (the “Agency”), you are hereby
notified that on April 14, 2026 the Board enacted an Eligibility Resolution for tax-exempt and/or
taxable multifamily housing mortgage revenue bond financing in an amount not to exceed
$15,400,000 for the new construction and equipping of2229 M Street Apartments project (the
“Development”). The Development is expected to be located at 2229 M Street NE, in Ward 5.
After completion, the Development is expected to consist of one (1) building, containing a total
of approximately seventy-two (72) residential rental units.
A copy of the Eligibility Resolution for the DC Council’s review is enclosed as Exhibit A. A
detailed description of the Development and its intended benefits are provided in the
development financing memorandum enclosed as Exhibit B. If you have any questions, please
contact me at (202) 777-1600.
Sincerely,
Michael L. Hentrel
General Counsel
Enclosures
Sincerely,
EXHIBIT A
DCHFAResolutionNo.2026-10
2229M St.ApartmentsEligibilityResolution
DISTRICT OF COLUMBIA HOUSING FINANCE AGENCY
RESOLUTION AS TO THE ELIGIBILITY OF 2229 M ST APARTMENTS FOR
TAX-EXEMPT AND/OR TAXABLE MULTIFAMILY HOUSING MORTGAGE
REVENUE BOND FINANCING
WHEREAS, the Districtof ColumbiaHousingFinanceAgency (the
“Agency’)receiveda requestfromLincolnWestmorelandHousingandTHC
AffordableHousing,Inc.(the“Applicant’)thattheAgencyprovideacquisition,
tehabilitation,and equippingfinancingfor2229M St.Apartments,whichupon
completion,isexpectedtoconsistofseventy-two(72)residentialunitsfinanced
withmultifamilyhousingmortgagerevenuebondsandisexpectedtobelocatedat
2229M St.NE Washington,D.G.,20002inWard5 (the“Project”);
WHEREAS, the Applicants have elected,pursuant to Section 142 of the
InternalRevenue Code of 1986, as amended (the “Cade”}, to set aside at least
fortypercent(40%)oftheunitsforhouseholdsatorbelowsixtypercent(60%)of
the area median income (“AMI”);
WHEREAS,theApplicantsareeligibleforLowIncomeHousingTaxCredits
pursuant to Section 42 of the Code, and have elected to set aside at leastone
hundredpercent(100%)oftheunitsattheProjectforhouseholdsatorbelowsixty
percent(60%)of AMI;
WHEREAS, theAgencyhasconductedapreliminaryreviewoftherequest
forfinancingoftheProjectinordertodetermine,amongotherthings,thatthe
Projectandthefinancingrequestedtherefor,complywiththerequirementsofthe
DistrictofColumbiaHousingFinanceAgencyAct,D.C.Law2-135,asamended,
D.C.Code§42-2701.01etseq.(the“Act”);
WHEREAS,theApplicantshaverequestedfinancinginanamountnotto
exceed$15,400,000throughan offeringoftheAgency'sTax-Exemptand/or
TaxableMultifamilyHousingMortgageRevenueBonds(the“Bonds’)forthe
financing,includingthefinancingofreasonablyrelatedandsubordinatefacilities
andanypermissiblereimbursementexpenses,oftheProject;
WHEREAS,alloraportionoftheProjectmaybefinancedwithproceedsof
theAgency'sTax-ExemptMultifamilyHousingMortgageRevenueBonds,and
suchportionthatisnotfinancedwiththeAgency'sTax-ExemptMultifamily
HousingMortgageRevenueBondsmaybefinancedwithproceedsof theAgency's
TaxableMultifamilyHousingMortgageRevenueBonds;
WHEREAS,AgencystaffrecommendstheissuanceoftheBondsinan
amountnottoexceed$15,400,000,inoneormoreseries,forthebenefitofthe
ApplicantsorotherrelatedentityaffiliatedwithorrelatedtotheApplicantsthatwill
ownandoperatetheProject(the“Borrower’);and
WHEREAS,providingthefinancingrequestedfortheProjectwillconfera
publicbenefitandservethepublicinterestbyloweringthecostofandexpanding
availablehousingopportunitiesforlowandmoderateincomeresidentsofthe
DistrictofColumbia(the“District’),allinaccordancewithandinfurtheranceofthe
purposesoftheActinthefollowingmanner:
1. Makingavailableapproximatelyseventy-two(72)units,onehundredpercent(100%)of whichareestimatedto be affordabletohouseholdswithincomesatorbelowsixtypercent(60%)ofAMI;
2. ProvidingopportunitiesforconstructionjobstoDistrictresidentsbyrequiringthattheApplicantsandtheBorrowergiveprioritytoDistrictresidents;and
3. ContributingtotheoverallsocialandeconomicimprovementoftheWard5neighborhood.
NOW THEREFORE, BE IT RESOLVED by the Board of Directorsof the
‘Agency(the“Board”)that
1.Basedupona reviewoftherequestbyAgencystaffasitrelatestothe
Project, the report on such review to the Board, the favorable
recommendation of the Executive Director/CEO, and upon due
deliberationand consultationwithAgencystaff,the Boardhereby
determinesthat,basedontherequirementsofeligibilityforfinancingby
theAgency,theProjectand itsfinancingby theAgencywillmeetthe
requirementsoftheAct.
2. Final approval of any financingshall be subject to such terms,
conditions,anddocumentationacceptableordeemednecessarybythe
Agency.
3. This reservationof volume cap in the amount of $15,400,000, to the
extentavailabletotheAgency,isfora periodofonehundredeighty
(180) calendar days, which period may be extended at the sole
discretionofthe Board.
4. AdoptionofthisEligibilityResolutionshallnotconstitutea commitment
fromtheAgencytoissuetheBondsortoprovidefinancingforthe
Project,
5.TheExecutiveDirector/CEOisauthorizedtoundertakesuchactionsas
arerequiredtobetakenpursuanttotheActandtheregulationsofthe
Agency,includingtheselectionoftaxprofessionalservices.
6.TheExecutiveDirector/CEOisherebyauthorizedanddirectedtosend
totheChairpersonoftheCounciloftheDistrictofColumbiawritten
notificationoftheadoptionofthisEligibilityResolutiondescribingthe
natureoftheProjectandthebenefitsdesignedtoresulttherefromas
requiredbyD.C.Code§42-2702.07
7. This EligibilityResolution shalltake effectimmediately.
DCHFA ResolutionNo. 2026-10
ADOPTED ON APRIL 14, 2026
AT A MEETING OF THE BOARD OF DIRECTORS.
ROLL CALL VOTE:
Heather Wellington : APPROVED
ScottieIrving 2 APPROVED
Yohance Fuller : APPROVED
CarriRobinson APPROVED
ChristopherE)Ronaldd
SecretarytotheB
EXHIBIT B
MULTIFAMILY UNDERWRITING MEMORANDUM
BOND INDUCEMENT APPROVAL
2229 M STREET NE 4%
2229 M STREET NE
WASHINGTON, D.C., 20002
72 UNITS
SENIORS (55+)
DEVELOPERS: LINCOLN WESTMORELAND HOUSING, INC. AND THC AFFORDABLE HOUSING, INC.
NEW CONSTRUCTION, NOT TO EXCEED $15,400,000
MAXIMUM LTV: 85%, MINIMUM DEBT SERVICE: 1.15X, OR HIGHER, AS REQUIRED BY LENDER
KADIJA SOW AND JAMES HOLLEY-GRISHAM
DATE: APRIL 14th, 2026
2
Project Name:
Project Address:
Ward:
Census Tract
DDA/QCT?
# of Units
Tenancy:
Building Type:
Primary Developer:
Tax Exempt Bond NTE Amount:
AMI Restrictions:
Applicable Subsidy:
Development Team:
General Contractor:
Property Manager:
Architect:
Construction Lender:
Permanent Lender:
Bond Counsel:
Neighborhood:
Total Development Cost Per Unit:
Underwritten Vacancy Rate:
Underwritten OpEx Per Unit:
PAM OpEx Per Unit Range:
Appraised Value:
LTV:
Capture Rate:
Penetration Rate:
Type:
Private Placement
Tax Exempt Bond Amount Aggregate Basis/Bond Basis 50% Test
14,265,000 58,135,764 30%
Debt Execution:
Underwritten:
Amount: 6,575,000
Interest Rate 6.93%
Amortization: 40
Term: 17
DSCR: 1.15x
LIHTC Equity Raise Rate: Total Amount:
Federal LIHTC Raise Rate: 0.77 17,904,025
DC LIHTC Raise Rate: 0.52 3,023,060
Permanent Debt:
Risk Share
50% Test:
10%
$9,246
$9,219-$9,407
$13,540,000
49%
1.3%
9.9%
Financing:
Bond Issuance:
Buyer:
Newpoint
$696,826
MODE4 Architects
NewPoint
Newpoint
TBD
Land Considerations:
Submarket:
Carver / Langston
Real Estate Considerations:
The CT Group
89.03
Yes
72
Seniors 55+
New Construction
Lincoln Westmoreland Housing and THC Affordable Housing, Inc.
$15,400,000
40% at 60% AMI
4 LRSP Units
Name:
Hamel Builders Inc.
7
Multifamily Lending and Neighborhood Investments
Credit Approval Request
Overview:
2229 M Street NE 4%
2229 M Street NE
3
PROPERTY LOCATION:
4
SITE AERIAL:
5
TRANSACTION SUMMARY:
The Multifamily Lending and Neighborhood Investments (“MLNI”) underwriting staff requests the
inducement approval from the District of Columbia Housing Finance Agency’s (“DCHFA” or the “Agency”)
Board of Directors (the “Board”) for the issuance of tax -exempt bonds in an amount not to exce ed
$15,400,000 to finance a portion of the costs to construct 72 units at 2229 M Street Apartments (the
“Development” or the “Property” ). The Senior Loan will be constrained to 85% stabilized Loan to Value
(LTV) and 1.15x amortizing debt service coverage ratio (DSCR).
The Development is comprised of two lots on the south side of M Street NE, east of 21st Place NE, and
north of Maryland Avenue NE (2225 and 2229 M Street NE) . The Property consists of approximately
15,068 square feet of land area and is currently improved with a three and a half story building that was
formerly used as a child development center and a two -story building that formerly included residential
units. Both buildings are currently vacant. Both buildings will be demolished prior to the construction of
the proposed Development.
In 2007, 2229 M Street NE was purchased by Flexicare Education, Inc ., for the purpose of creating the
Carver Terrace Early Childhood Development Center, an early childhood center for children six weeks to
five years old. As of March 17 th, 2022, Flexicare Education, Inc. (seller) sold the parcel, via a Fee Simple
Deed, to 2229 M Street NE LLC for $3,450,000. Given the project was not an existing apartment complex,
the Tenants Opportunity to Purchase Act (“TOPA”) was not t riggered. The new owner and borrowing
entity (“Borrower”) for the proposed transaction is 2229 M Street NE LLC . In 2026, the site is designated
a Qualified Census Tract (QCT) and is eligible for a 30% LIHTC basis boost.
The proposed development plan is to have the project be a “twinning deal”. For context, a twinning deal
consists of combining competitive 9% low-income housing tax credit (LIHTC) financing with the proposed
4% LIHTC financing into one building. This creates two related, but separate projects for the purposes of
maximizing equity and reducing any potential funding gaps. MLNI has evaluated both projects to
understand the overall viability of the proposal; however, DCHFA will only finance the 4% project.
The site will consist of one eight-story, high rise building which will be restricted to residents earning
between 30% and 80% of Area Median Income (“AMI”) or less. Combined, the building will consist of a
total of 92 units including three (3 ) efficiency units, 66 one-bedroom units, and 23 two-bedroom units.
Furthermore, the 9% LIHTC portion of the building will consist of 20 units with three (3) efficiency units
and 17 one-bedroom units. The remaining 72 units, 49 one-bedroom units and 23 two-bedroom units,
will be a part of the 4% LIHTC portion of the building. DCHFA will only be financing the 4% percent LIHTC
portion of the building.
The Development is in the Carver/Langston neighborhood of Washington, D.C. located in Ward 5. The site
is bounded by the National Arboretum to the north , a federally owned triangular lot to the east,
apartment buildings to the west, and an alley to the south . The Development is not within walking
distance to any metro stations within Washington, D.C. However, the Site is located within 500 feet from
the nearest bus stop which services the C43 bus, which is serviced every 15 minutes and provides access
to Union Station westbound. Additionally, a shuttle will be offered weekly to assist seniors with groceries
and other needed shopping trips. The site is approximately 0.5 miles from an ALDI grocery store and one
mile from the stores and restaurants on the H Street Corridor.
6
Property amenities will include a fitness center, community room, bike storage, a courtyard, rooftop deck,
as well as space for administration and supportive services for residents. In -unit amenities will include
internet in common areas, washers and dryers, central air conditioning, dishwashers, and garbage
disposals. There will be six parking spaces offered at the Development. Additionally, a free weekly shuttle
service to Bladensburg Road and Benning Road will be provided for the tenants as required by the PUD
zoning order.
The capital stack for the 4% percent portion of the Development will consist of permanent finan cing in
the approximate amount of $6,575,000 as a Senior Loan, a $19,771,820 DHCD HPTF loan, $17,904,025 in
Low Income Housing Tax Credit, or “LIHTC” Equity, $3,023,060 in DC LIHTC Equity, and a $2,897,562
Deferred Developer Fee . The t otal development cos t for the 4% portion of the Development is
$50,171,466 ($696,826/unit), inclusive of acquisition debt repayment, hard and soft costs, developer and
financing fees, reserves and escrows. The 9% portion of the building will be financed with debt, federal
and state Low Income Housing Tax Credits and deferred developer fees. Please review the loan structure
section of this memo for a breakdown of all Sources and Uses, including the 4% transaction, nine percent
transaction, and the combined total for the entire Site.
The Borrowing Entity is 2229 M Street NE Owner LLC (the “Owner” or “Borrower”). The Borrowing entity
consists of a joint venture with a 0.009% ownership stake between THC Affordable Housing (51%) and
Lincoln Westmoreland Housing (49%) with Red Stone Equity as LIHTC investor with a 99.991% ownership
stake.
The remaining members of the development team consist of Hamel Builders, Inc. as General Contractor,
MODE4 Architecture as Architect, and The CT Group as Property Manager. KeyUrban will serve as the
development consultant and EquityPlus will serve as the finance consultant for the Project.
STRENGTHS / RISKS (KEY MITIGANTS):
1. Limited Access to Public Transportation : The proposed Development in not within walking
distance to Metro stations. The closest M etro station is the Minnesota Avenue Metro Station,
which is 2.2 miles away from the Development.
o Access to Public Transportation Risk Mitigant: The site is served by the C43 bus line,
which provides access to Union Station and runs every 15 minutes . Additionally,
MetroAccess is available to eligible seniors. MetroAccess is a shared-ride, door -to-door,
paratransit service for eligible customers whose disability prevents them from using bus
or rail. Costs $4.50 per ride. Seniors can book one day prior to the shuttle need.
o Shuttle Service: A weekly shuttle service to Bladensburg Road and Benning Road will be
offered at no cost to the residents as required by the PUD.
2. Reputational Risk: DCHFA will be providing $ 14.2MM in tax -exempt volume cap to the
transaction and will be publicly associated with the Development.
o Reputational Risk Mitigant: Lincoln Westmoreland Housing (LWH) is an experienced
sponsor in Washington, DC and the development team has the capacity to complete the
project on time and schedule. LWH is supported by a consulting firm that will assist in the
completion of this project. KeyUrban will serve as the development consultant and Equity
Plus will serve as the financial consultant for the project and they have recently closed
multiple DCHFA financed transactions. LWH owns three properties that are in the DCHFA
7
portfolio (2911 Rhode Island Avenue, Lincoln Westmoreland and Channing Phillips). 2911
Rhode Island Avenue closed with tax-exempt bond in January of 2025. The remaining
DCHFA project are performing well with no major concerns.
STRENGTHS:
1. Property Amenities: The Property will offer a fitness center, internet in common areas,
community room, bike storage, a courtyard, rooftop deck, as well as space for administration and
supportive services for residents. In- unit amenities will include washers and dryers, central air
conditioning, dishwashers, and garbage disposals. Given that the community amenities offered at
existing tax credit properties are limited, the proposed amenities at the Subject are attractive.
8
LOAN STRUCTURE
The Development will be financed through the issuance of $ 14,265,000 million in DCHFA tax -exempt
bonds ($7,690,000 short term bonds and $6,575,000 long term bonds).
Newpoint is providing a private placement construction to permanent loan. Additionally, Newpoint will
originate and close a 223f loan with a forward rate lock. Newpoint will lock the rate of this 223f at financial
closing with a market standard swap agreement. When the loan is closed with HUD after the project is
placed in service, the collateral for the bonds will shift from the real estate to the Ginne Mae security for
the 223f Loan. This loan product is described in the addenda of this report. For the sake of conservatism,
DCHFA has underwritten the rate for the private placement construction to permanent loan because the
223f loan would need to be approved upon conversion. The transaction is feasible as a private placement
loan without the 223f loan. The current interest rate is 6.93%. The rate will be floating until financial
closing and will be priced at 18 Year BVAL plus a spread of 3.45%.
As of 04/07/2026, the construction to permanent loans are underwritten to have a 6.93% interest rate,
inclusive of the 40 basis point long term issuer fee and a 50bps buffer for interest rate volatility. Loan
amounts and interest rates are subject to change based on the timing of the rate lock. At the time of rate
lock the loan amount and interest rate will be updated based on the market and the agency’s
credit/underwriting guidelines (85.0% LTV, 1.15x DSCR).
9
SOURCES AND USES (4% LIHTC) – DCHFA FINANCED PROJECT
SUMMARY OF CONSTRUCTION SOURCES AND USES (4% LIHTC):
SUMMARY OF PERMANENT SOURCES AND USES (4% LIHTC):
SOURCES AND USES (9% LIHTC)
SUMMARY OF CONSTRUCTION SOURCES AND USES (9% LIHTC):
Sources $ Uses $
Construction Loan: $22,961,211 Acquisition: $5,791,304
DHCD HPTF Loan: $19,771,820 Construction: $28,465,093
LIHTC Equity: $1,790,402 Soft Costs: $4,010,902
DC LIHTC Equity: $302,306 Financing Fees: $6,148,748
Developer Fee: $409,692
Total Construction Sources $44,825,739 Total Construction Uses $44,825,739
Sources $ Uses $
Senior Loan: $6,575,000 Acquisition: $5,791,304
DHCD HPTF Loan: $19,771,820 Construction: $28,465,093
LIHTC Equity: $17,904,025 Soft Costs: $4,010,902
DC LIHTC Equity: $3,023,060 Financing Fees: $6,148,748
Deferred Developer Fee: $2,897,558 Developer Fee: $4,946,015
Reserves and Escrows: $809,400
Total Permanent Sources $50,171,462 Total Permanent Uses $50,171,462
Sources $ Uses $
Construction Loan: $11,287,108 Acquisition: $1,608,696
HPTF Loan: $0 Construction: $7,906,970
Sponsor Loan: $1,000,000 Soft Costs: $1,114,139
LIHTC Equity: $881,187 Financing Fees: $1,450,724
DC LIHTC Equity: $286,128 Developer Fee: $1,373,893
Total Construction Sources $13,454,422 Total Construction Uses $13,454,422
10
SUMMARY OF PERMANENT SOURCES AND USES (9% LIHTC):
SOURCES AND USES (COMBINED)
SUMMARY OF CONSTRUCTION SOURCES AND USES (COMBINED):
SUMMARY OF PERMANENT SOURCES AND USES (COMBINED):
Sources $ Uses $
S
enior Loan: $2,210,855 Acquisition: $1,608,696
LIHTC Equity: $8,811,867 Construction: $7,906,970
HPTF Loan: $0 Soft Costs: $1,114,139
DC LIHTC Equity: $1,487,867 Financing Fees: $1,450,724
Sponsor Loan: $1,000,000 Developer Fee: $1,373,893
DBH Grant: $200,000 Reserves and Escrows: $256,166
Deferred Developer Fee: $0
Total Permanent Sources $13,710,588 Total Permanent Uses $13,710,588
Sources $ Uses $
Construction Loan: $34,248,318 Acquisition: $7,400,000
DHCD HPTF Loan: $19,771,820 Construction: $36,372,065
LIHTC Equity: $2,671,589 Soft Costs: $5,125,041
DC LIHTC Equity: $588,434 Financing Fees: $7,599,472
Sponsor Loan: $1,000,000 Developer Fee: $1,783,585
Total Construction Sources $58,280,162 Total Construction Uses $58,280,162
Sources $ Uses $
S
enior Loan: $8,785,855 Acquisition: $7,400,000
DHCD HPTF Loan: $19,771,820 Construction: $36,372,063
LIHTC Equity: $26,715,891 Soft Costs: $5,125,041
DC LIHTC Equity: $4,510,926 Financing Fees: $7,599,472
Deferred Developer Fee: $2,897,558 Developer Fee: $6,319,908
Sponsor Loan: $1,000,000 Reserves and Escrows: $1,065,566
DBH Grant: $200,000
Total Permanent Sources $63,882,050 Total Permanent Uses $63,882,050
11
FINANCIAL ASSUMPTIONS:
Permanent Loan All-In Interest Rate 6.93%
Permanent Loan Amortization 40 years
Lock Out Period None
Permanent Loan Term 17 years
Minimum Amortizing DSCR (YR 3) 1.15x
DCHFA FEE SCHEDULE:
SUBORDINATE DEBT:
The developer was awarded and used $19,771,820 in DHCD Housing Production Trust Funds (HPTF). The
terms for the HPTF loan are as follows:
• Interest Rate: 3 % on principal amount.
• Loan Term 42 years (Loan matures 42 years from Placed in Service Date.)
• Repayment: 75% of Free Cash Flow (As defined in the loan agreement.)
• Collateral: Second Deed of Trust
• Non-Recourse
DCHFA Bond Application Fee 14,270$
D
CHFA Financing Fee 285,300$
DCHFA Construction Monitoring Fee 284,651$
DCHFA/Issuer's Counsel Fee 45,000$
DCHFA Issuer Fee (ST Bonds) 80,104$
DCHFA Issuer Fee (LT Bonds) 54,791$
DCHFA LIHTC Allocation Fee 139,526$
Total Fees 903,642$
12
TAX CREDIT STRUCTURE:
The Sponsors selected Red Stone Equity Partners LLC (“Red Stone”) as LIHTC investor for the transaction.
Per the letter of intent (“LOI”) an affiliate of Red Stone will have a 99.99% ownership interest in the
Development at the purchase price of $0.77 per $1.00 of federal tax credits. Red Stone will provide an
estimated total equity investment of $17,904,025 for the 4% LIHTC portion of the project . The equity
investment is subject to DHCD providing a projected annual allocation of $2,325,431, for a total 10-year
allocation of $23,254,310. The investment will be sufficient to fund the required equity for the transaction.
HFA underwriting assumptions project a qualified basis of $ 58,135,764 an annual LIHTC amount of
$2,325,431 and a total equity investment of $ 17,904,025. The LIHTC equity installments are 10% at
financial closing, 35% at construction completion , 53% at final cost certification, and 2% upon receipt of
the 8609.
DC LIHTC: In addition to the federal tax credits, 2229 M is eligible to receive DC LIHTC based on the District
of Columbia Low -Income Housing Tax Credit Clarification Amendment Act of 2020 and the District of
Columbia Low-Income Housing Tax Credit Amendment Act of 2023. The purchaser of the credits will be
Advantage Capital. as the “DC LIHTC Investor”, and the credits will be purchased at a rate of $0.52 per
credit. The pay-in schedule for the DC LIHTC equity will match the federal LIHTC equity schedule. DC LIHTC
equity installments are 10% a financial closing, 55% at construction completion, 33% at stabilization, and
2% at 8609.
Acquisition Construction
$6,080,870 $40,042,226
$6,080,870 $40,042,226
100% 100%
QCT 100% 130%
$6,080,870 $52,054,894
4.00%
$2,325,431
99.99%
0.77$
$17,904,025
Projected LIHTC Qualified Basis
Investor Pay Rate
LIHTC Calculation
Eligible Basis
Adjusted Basis
Projected Applicable Fraction
$58,135,764
Tax Credit Rate
Annual LIHTC Amount
L.P. Ownership
Projected LIHTC Investor Equity
Total Tax Credit Received Over 10 Year Period 23,254,306$
25% of Total Allocation 25%
DC Tax Credit Amount 5,813,576$
Pricing Per Credit $0.52
Total DC LIHTC Equity 3,023,060$
DC LIHTC Calculations
13
DDA/ QCT Map:
The Subject site is located in a qualified census tract (QCT) and is eligible to receive a 30% basis boost .
Please see map of the Subject below:
SPONSOR /DEVELOPER/ GUARANTOR ANALYSIS
Developer: Lincoln Westmoreland Housing (LWH)
Lincoln Westmoreland Housing Inc. (LWH) is a non-profit 501(c)(3) corporation first chartered in the
District of Columbia in 1967. It was established by two United Churches of Christ that were looking for a
way to respond to the deterioration of the Shaw neighborhood and the destroyed 7th Street corridor
following the riots that took place after the death of Martin Luther King, Jr.
Since then, and for over 50 years, LWH has been providing quality affordable housing in the Shaw
community. LWH has partnered with its owner representative, KeyUrban, to pursue affordable housing
projects together. Recent projects and accomplishments include:
• The 2015 refinance, repositioning, and renovation of Lincoln Westmoreland Apartments. This
$32,000,000 project leveraged low-income tax credits and tax-exempt bond financing to perform
a substantial in-place renovation while also converting commercial space into additional dwelling
units.
• The 2016 new construction of Channing E. Phillips Homes. This $22 ,000,000 project produced 56
units of affordable housing and over 3,500 square feet of community-serving retail.
14
• The 2021 refinance of Lincoln Westmoreland Apartments. This mortgage refinance resulted in an
annual debt service reduction of $195,000.
The non-profit is served by a board of directors which includes a President (David Jacobs), Vice President
(Sharon Bartholomew), Secretary (Pamela Mertz), and Treasurer (Karen J. Hammond).
Lincoln Westmoreland Housing (LWH) (the “Guarantor”) is responsible for providing completion and
financial guarantees for the Project. Staff analyzed the Guarantor’s consolidated fiscal year end 2023 ,
2024, and 202 5 financial statements for the Guarantor to determine its financial capacity to guarantee
the Project.
Staff reviewed current ratio, working capital, and net worth. Current Ratio is a liquidity measure that
gives an indication of an entity’s ability to pay immediate liabilities and is calculated as current assets
divided by current liabilities. Working capital is calculated by subtracting current liabilities from current
assets and is used to determine available capital. The final measure is the net worth of the entity, which
is the value of the company. It is calculated as total assets minus total liabilities.
The chart below details the key financial ratios for the guarantor:
The ratios indicate that the Guarantor has adequate financial strength, liquidity, working capital, and net
worth.
Financing and Development Consultants: Key Urban and EquityPlus
KeyUrban, LLC and EquityPlus are the financing and development consultants for the Project. KeyUrban,
LLC has been providing specialized real estate project management services for non -profit and for-profit
organizations in the DC area since 2004 and is a Certified Business Entity (CBE) in the District. KeyUrban
has three full time staff headquartered in DuPont Circle in Washington, D.C. The key employees at
KeyUrban are Dahn Warner (Principal), Nadim van de Fliert (Director), and William Chin (Manager).
KeyUrban will oversee the design, permitting, and construction of the project on behalf of the Borrower.
Additionally, KeyUrban is providing all development management and owner coordination, from project
concept, through occupancy. KeyUrban has served as a development consultant for the following projects:
• Channing E. Phillips: New construction of 56 affordable units.
• Fortitude at Delta Towers: New construction of 179 affordable units.
• Delta Pearl: Renovation and repositioning of 160 mixed-income units.
• Barbara Chambers Children’s Center: Renovation of 22,000 SF education facility.
• Educate DC: Renovation of five different early education centers.
• 2911 Rhode Island: New construction of 100 affordable units.
EquityPlus is managing all financial modeling and procurement of project sources, including
communication with lenders, investors and government agencies. EquityPlus provides investment
banking and owner’s representation services to developers and banks seeking either to invest in or
develop projects serving low -income communities (LIHTC, HTC, NMTC, and various subsidy programs)
15
across the country. When working with their partners they provide a range of services depending on the
needs of the particular organization. In some cases, they take a lead role in helping the nonprofit obtain
development financing from lenders, tax credit equity investors, and government capital cost and
operating subsidies – from running the financial models to negotiating term sheets and coordinating the
closing process. In other cases, they also provide owner’s representation services – taking a lead ro le in
developing the project by working directly with the design team, general contractor, tenants (in occupied
buildings) and other professionals necessary to build the project. EquityPlus has four full-time employees.
Avram Fechter: Before co -founding EquityPlus, Mr. Fechter worked for the District Government
underwriting and closing over $400 million in LIHTC and NMTC financed projects while deploying $3
million of 9% LIHTC Allocation and $80 million of District Government loans. Mr. Fechter has closed over
$800 million in NMTC/HTC/LIHTC.
16
ORGANIZATION CHART
The Borrowing Entity is 2229 M Street NE Owner LLC (the “Owner” or “Borrower”). The Borrowing entity
consists of 2229 M Street NE Class B LLC (“Non-Managing Member”, 0.008% interest), 2229 M Street MM
LLC (“Managing Member”, 0.001% interest), Red Stone Equity – Fund 111 Limited Partner (“Tax Credit
Investor”, 99.99% interest), and Red Stone Equity Manager LLC (“Special Investor Member”, 0.001%
interest). The Managing Member consists of a joint venture with a 0.009% ownership stake between THC
Affordable Housing (51%) and Lincoln Westmoreland Housing (49%) with Red Stone Equity as LIHTC
investor with a 99.991% ownership stake. Please see the detailed orgizational chart below:
17
GENERAL CONTRACTOR
Hamel Builders (“General Contractor”) will be the general contractor for the Project. Hamel Builders was
founded in 1988 and the firm has developed over 35,000 units of multi -family residential, affordable
housing, adaptive reuse, senior living, historic, and mixed -use development, including about 7,000
resident-in-place renovations. Recent 4% LIHTC deals in the District of Columbia for the General
Contractor include Belmont Crossing Phase 1, Ridgecrest Phase 1, Park Morton and 17 Mississippi.
Hamel Builders currently has 16 projects under construction including the following communities financed
by DCHFA: 2911 Rhode Island Avenue, The Asberry, Alabama Apartments, The Clara, and Villages of East
River.
DCHFA’s construction management team finds Hamel Builders qualified and a reliable general contractor
from prior work experience.
PROPERTY MANAGEMENT:
The CT Group LLC (CTG) will be the property management agent for the Project is CTG is headquartered
in Laurel, Maryland. Since 1981, the CTG have provided asset and property management services for
owners of affordable/moderate-income rental housing. In addition to long-term management contracts
for both conventionally financed and subsidized housing, CTG has served as an interim manager to
reposition troubled and underperforming multifamily properties prior to a sale by owners or lenders.
Tanya Daye-Holt is the Regional Property manager for the District of Columbia. Tanya Daye-Holt joined CT
in 1993 as an Accountant. During her tenure with CT, she served in the capacity of Property Servicer,
Trainer and Property Manager. Prior to joining CT, Ms. Holt worked in the senior housing industry. Ms.
Holt has been involved in multifamily property management and accounting since 1989.
Currently Ms. Holt is responsible for the management of properties located in the District of Columbia
and Maryland. During her tenure as a Property Manager Ms. Holt has become well versed in the HUD
REAC and Annual Management and Occupancy Review (MOR) process and was a principal contributor to
the company’s REAC and MOR Training and Policies and Procedures Handbooks. Ms. Holt’s properties
have been highly rated by various program Inspectors. One of her properties achieved a REAC score of
99a and none have earned less than an 84. Her MOR scores are consistently Above Average.
Project 1 Project 2 P roject 3 Project 4 Project 5
Project Name Cascade Park 9% 17 M ississippi Avenue Providence Place Liberty Place Stanton Square
Project Location 4248 4th Street SE 17 M ississippi Avenue SE 601 50th Street NE 901 3rd Street NW 2910 Stanton Road SE
Construction Completion Date: 12/31/2023 3/ 31/2023 2/7/2022 1/18/2022 5/28/2021
Total Construction Cost $12,402,706 $13, 678,976 $23,710,042 $23,231,136 $28,450,618
Total Number of Units 73 41 93 71 121
Total Construction Cost/Unit $169,900 $333, 634 $254,947 $327,199 $235,129
On Time Delivery Yes, Project was completed
within the Contract Time.
Yes, Project was completed
within the Contract Time.
Yes, Project was completed
within the Contract Time.
Yes, Project was completed
within the Contract Time.
Yes, Project was completed
within the Contract Time.
Project Description Garden Style Renovation M id-Rise Mid-Rise High-Rise Mid-Rise
CBE & MBE Goals Achieved? Yes - Above 35% Y es - Above 35% Yes - Above 35% Yes - Above 35% Yes - Above 35%
First Source Goals Achieved? Yes Y es Yes Yes Yes
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The CT Group LLC currently manages approximately 7,000 multifamily units in the District of Columbia,
Maryland, Virginia, North Carolina, Kentucky, Ohio, Pennsylvania and Florida. The company began
operations in 1981 with a focus on the management of affordable and subsidized housing. The company
also currently has 1,359 units under management in DC of which over 1,000 have LIHTC or other
regulatory requirements. The CT Group LLC has been selected as the property manager for the recently
closed DCHFA project 2911 Rhode Island Avene.
DCHFA’s Portfolio and Asset Management (“PAM”) Staff indicated that there are no current outstanding
issues with the management company.
ARCHITECT
MODE4 Architecture (MODE4) will be the Architect of record for this Project. MODE4 is a full-service
architectural firm starting in 2013, with clients throughout Maryland, Virginia, and the District of
Columbia. The firm has two full -time architects, Chris Tucker and Robert McClennan. Robert McClennan
is a partner and owner of MODE4 . Mr. McClennan joined MODE4 in 2023 and has previous experience
with many well -known Washington, D.C. architecture firms (ZDS Architecture and Design, Boonstra
Haresign Architects, Torti Gallas and Partners) over the past 30 years.
MODE4 provides the following services to the clients: programming, master planning, urban planning,
adaptive re use, and historic preservation. The firm has extensive experience developing multifamily,
energy efficient housing, including The George ( 192-unit LEED Silver building in Wheaton, MD) and The
Cadence (97-unit Enterprise Green Communities building in Arlington, VA). Also, Mr. McClennan has direct
experience working on 4% LIHTC projects financed by DCHFA , having worked on 950 Eastern Avenue (56
unit Enterprise Green Community LIHTC building in Washington, D.C.).
DCHFA staff has received the completed floor plans and scope of work for the Project.
SITE CONTROL:
In 2007, 2229 M Street NE was purchased by Flexicare Education, Inc., for the purpose of creating the
Carver Terrace Early Childhood Development Center, an early childhood center for children six weeks to
five years old. As of March 17th, 2022, Flexicare E ducation, Inc. (seller) sold the parcel of land, via a Fee
Simple Deed, to 2229 M Street NE LLC. 2229 M Street LLC purchased the land for $3,450,000. Given the
project was not an existing apartment complex, the Tenants Opportunity to Purchase Act (“TOPA”) was
not triggered. The new owner and borrowing entity (“Borrower”) for the proposed transaction is 2229 M
Street NE LLC. In 2026, the site is designated a Qualified Census Tract (QCT) and is eligible for a 30% LIHTC
basis boost.
The proposed development plan is to have the project be a “twinning deal”. For context, a twinning deal
consists of combining competitive 9% low-income housing tax credit (LIHTC) financing with the proposed
4% LIHTC financing into one building. This creates two related, but separate projects for the purposes of
maximizing equity and reducing any potential funding gaps.
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ENVIRONMENTAL REPORT:
A Phase I environmental assessment report was completed by Partner Engin eering and Science, Inc.
(Partner) on March 21 st, 2024, for 2229M Street . Additionally, KDS Services, LLC (KDS) completed a
environmental assessment in June of 2022 for the adjacent parcel 2225M street. Combined, the two
parcels make up the proposed Development site. Both assessments were done in conformance with the
Standard Practice for Environmental Site Assessments: Phase I Environmental Site Process (ASTM
standard E 1527-13 (Partner) and ASTM standard E 1527-13 (KDS)). Updated environmental reports will
be required for final bond.
The Partner report identified one Recognized Environmental Condition (REC) for 2229 M Street NE.
According to the regulatory database report, 2229 M Street NE was formerly equipped with one 2,000 -
gallon heating oil underground storage tank (UST) that was in use up until the 1990s. Partner submitted a
Freedom of Information Act (FOIA) request to the Department of Energy and Environmental (DOEE)
regarding information on the UST. The FOIA response was provided after the publication of the Phase I
report, and it was not incorporated into the report's conclusions. The FOIA response showed evidence
that the UST was removed in 2000 and soils remediations was completed. The FOIA request did not
indicate if the UST was properly decommissioned through the Voluntary Clean Up Program. Given the lack
of documentation, there may still be soil and/or groundwater contamination at the Subject. Prior to final
bond, Partner will evaluate the FOIA response and determine if a Phase II evaluation, including soil borings
and testing, is required.
As a contingency, the Sponsor has budgeted $350,000 between the two projects for “Testing and
Inspections” and “Environmental and Soil Reports”. Additionally, the construction budget includes
$285,000 for soil excavation. An updated Phase I report pertaining to the tank removal and remediation
will be required for final bond. If Partner determines that a Stage II report is needed, then this will be an
additional requirement for Final Bond.
The KDS assessment for 2225 M Street NE found no evidence of Controlled Recognized Environmental
Condition’s (CREC) or Historical Recognized Environmental Condition’s (HREC), or De Minimis Conditions.
ZONING & ENTITLEMENTS:
On May 3rd, 2022, the Sponsor submitted the Application for a consolidated Planned Unit Development
(PUD) and related map amendment from the RA -2 zone to the RA -4 zone for the Development. As
referenced in the PUD, t he total gross floor area included in the Project will be approximately 66,687
square feet, for a floor area ratio (“FAR”) of approximately 4.435 and a building height of approximately
71 feet, 8.5 inches.
The PUD was voted on and approved on February 16 th, 2023. Please see appendix three for the PUD
approval.
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SCOPE OF WORK:
The Development is comprised of two record lots on the south side of M Street NE, east of 21st Place NE,
and north of Maryland Avenue NE (2225 and 2229 M Street NE) . Both buildings will be demolished prior
to the construction of the proposed Development.
The newly constructed building will be a 92 -unit cast-in place concrete , all-affordable senior residential
building. The building will face M Street NE, which serves as its main entrance area and will consist of eight
above-grade stories and one partially below-grade floor. There will be 6 surface parking spaces. A loading
berth will be located at the rear of the building and accessed off the alley, and the service /delivery space
will be located adjacent to the parking spaces and accessed off the rear alley as well. There will also include
long- term bicycle parking within the building and short -term bicycle parking outside in public space
adjacent to the property.
The project will include residential amenity space, including a fitness center and community room, as well
as space for administration and supportive services for residents. The project will include a mix of studio,
one-bedroom and two -bedroom apartments and will be consistent wi th market demand for senior
housing services. These units will be specifically designed to serve the lower income, senior population,
including a higher percentage of accessible units than typically required. Additionally, all units will include
resident amenities like in- unit washers and dryers. The building will have controlled access and cameras
with 24-7 monitoring.
The project will also contain significant environmental and sustainability features and will be designed to
achieve Enterprise Green Communities Plus (“EGC+”) certification. Additional sustainable features include
approximately 790 square feet of green roof and 2,400 square feet of solar panels. These solar panels are
expected to generate 41,080 KWh (41.08 MWh) of energy. The project will also include significant
landscaping for stormwater management , EnergyStar appliances, and energy efficient lighting fea tures
within units.
GENERAL TENANT SERVICES
Jaydot, LLC (Jaydot) will provide resident services to all residents for the Project. Jaydot has experience
providing resident services to residents in affordable housing projects in the District of Columbia,
particularly in buildings with a significant number of Permanent Supportive Housing (PSH) units. In
addition to being a Department of Human Services (DHS) PSH contractor, Jaydot is currently performing
resident services programming in three affordable housing developments in the District; the John and Jill
Ker Conway Residence (124 units), the HELP Walter Reed project (77 units) and the Rise at Temple Courts
(220 units) all of which are DCHFA financed transactions.
Jaydot will work with residents to help them create and lead activities that enhance individual and
community well-being, from support groups to regular community gatherings. The Jaydot team will also
foster connections with neighborhood partners to ensure residents are integrated within the larger
community.
Resident Services programming for the 2229 M project will be voluntary, free of charge and open to all
residents (The PSH Case Management services, funded through a Human Care Agreement (HCA), will be
provided exclusively to the tenants in the PSH units.)
21
Jaydot intends to have its Resident Services staff commit approximately 40 hours per week to focus on
social programming at the Project. Jay Dot will provide the following services for the residents:
• Training and Educational Programming – Environment, Health and Wellness
o This includes providing access to both fresh food (Via the FarmFresh program), non -
perishable food items (the Food Bank’s Grocery Plus program), and other food programs;
providing nutrition awareness through collaboration with the Food Bank's programs, to
include on -site sessions; and provides access to Counseling Services, both through
Jaydot’s case management staff as well as outside providers, as appropriate.
• Training and Educational Programming – Academic and Economic Empowerment
o This includes providing information and referrals for tenants on Job Opportunities and
Vocational Training Classes, with a specific focus on apprenticeship programs and building
relationships with potential employers in the immediate neighborhood s; providing
information and referrals to tenants on Tutoring and Educational Opportunities ; and
providing information and on-site training sessions for tenants to pursue Homeownership
Opportunities, particularly through the District's Home Purchase Assistance Program
(HPAP) and the federal Veterans Housing Purchase Assistance programs.
• Resident Involvement and Organizational Capacity-Building
o This includes providing Provides access to Legal Services (Legal Counsel for the Elderly, VA
Legal Assistance), through referrals and on-site sessions with outside providers ; creating
opportunities for empowering a r esident council, to provide direct feedback on the
operations of the building’ and provide awareness to all tenants of Community Events
and Volunteer Opportunities in the surrounding neighborhood.
The projected annual expenses for the tenant services is $72,000 ($1,000/unit).
PERMANENT SUPPORTIVE HOUSING SERVICES:
Jaydot, LLC (“Jaydot”) will also provide 24 units (only four are in the 4% project ) with Permanent
Supportive Housing (PSH) program for eligible residents/households living at the Subject property. The
Property will include 12 units that meet the Uniform Federal Accessibility Standards (UFAS), three of which
will be reserved for a PSH participant.
Jaydot LLC was established in 2010 by Chapman Todd, who remains the sole Principal and owner. Jaydot
is recognized as a Certified Business Enterprise (CBE) by the District’s Department of Small and Local
Business Development (DSLBD), in the categories of Local Business Enterprise (LBE), Small Business
Enterprise (SBE) and Resident Owned Business (ROB). The focus for the Jaydot Permanent Supportive
Housing Program is providing services to tenants in buildings with a significant number of PSH tenants
such as the proposed development. Jaydot currently has in place a contract with the District’s Department
of Human Services (DHS) to provide PSH services under a Human Care Agreement (HCA).
Jaydot’s programming includes tenant organized and led community social events, tenant empowerment
efforts (such as the creation of Resident Advisory / Peer Leadership Councils), and opportunities for
tenants to become directly involved with neighborhood groups and community activities. Jaydot’s staffing
plan for this project includes a part-time Case Management Supervisor and a full-time Case Manager.
22
This staffing level, and all associated costs for the provision of the PSH services, will be funded to Jaydot
directly through the HCA contract with DHS, and will not be part of the project’s operating budget. Jaydot’s
staffing plan meets the requirements of Section 7.1.21 and 7.1.23 of the Districts Human Care Agreement
(HCA) standards for PSH program staffing.
MARKET DESCRIPTION:
The site is in Ward 5, near the Carver/Langston and Trinidad neighborhoods, on the south side of M Street
NE, east of 21st Place NE, and north of Maryland Avenue NE and consists of approximately 15,068 square
feet of land area, or approximately 0.35 acre. The site is bounded by the national arboretum to the north,
apartments building to the west, a federally-owned triangular lot to the east, and an alley to the south.
The immediate neighborhood around the site is generally comprised of low - to mid - rise apartment
buildings in the RA -2 Zone District to the west and south as well as significant open spaces immediately
adjacent. In addition to the unimproved property to it s east, the National Arboretum is located
immediately to the north of the site, across M Street NE, and Langston Golf Course is located to the
southeast. The Trinidad Recreation Center and Rosedale Recreation Center are also located in close
proximity to t he site. The site is approximately 0.5 miles from an ALDI grocery store and one mile from
the stores and restaurants on the H Street Corridor. The site is served by the C43 bus line, which provides
access to Union Station. It is also located west of the Anacostia Freeway (I-295), which provides access to
the remainder of Washington DC, Maryland, and the Capital Beltway.
VACANCY AND ABSORPTION:
Based on the September 2023 market study conducted by Novogradac , there appears to be adequate
demand for the Subject property to operate as an affordable LIHTC property following the proposed
construction. An updated market study will be required for final bond.
The comparable properties in the submarket reported vacancy rates ranging from zero to 10.4%, with an
overall weighted average of 1. 5%. Managers at three of the six LIHTC properties reported being fully
occupied, while another two reported just one vacancy each. The average vacancy rate reported by the
affordable comparables was 1.1% , below the 1.8 % weighted average reported by the market rate
properties. All the market rate properties reported vacancies of 10.4% or less. Management at 1600
Pennsylvania Avenue Southeast, which reported the highest vacancy rate among the market comparables
of 10.4%, was unable to provide a reason for the elevated vacancy but indicated that the property typically
maintains a vacancy rate of approximately 6%.
Currently in the District there are elevated collection loss rates, which may still be in effect when the
construction of the community is complete. Based on the November 2025 Cohn Reznick Affordable
Housing Credit Report (published bi -annually, the new report will be published in November 2025), the
average Debt Service Coverage Ratio (DSCR) for a LIHTC community in the District is 0.81x and the average
per unit cash flow is -$769 (owners are funding operations from their balance sheets due to deficits).
Additionally, in conversations with property managers, vacancy and collection loss rates range from 10%
to 25%. MLNI has underwritten a vacancy and collection loss of 10%.
23
For the reported targeted population, the market study projected a capture rate of 1.3 % of income -
eligible renter households to fully occupy the building. Furthermore, the Primary Market Area (PMA)
projected penetration rate is 9.9% for the proposed development, and 18.8% without the project subsidy.
Based on the overall capture rate of 1.3%, there is a sufficient number of income- qualified renter
households in the market area who could afford the Subject at the proposed rents. The penetration rate
is calculated as the number of rent restricted units divided by the number of income eligible tenants. Both
the capture and penetration rates are well within a reasonable and achievable range, with the subsidies
provided.
The market study estimates an overall lease -up pace of 20 units per month for the Development. At this
pace, the Subject should reach stabilized occupancy of 90% within four to five months.
APPRAISAL:
DCHFA underwriting staff has reviewed the appraisal prepared by Novogradac & Company LLP for the
Property, dated September 5th, 2023. The appraisal concludes a n “As Complete and Stabilized” market
value of $17,300,000, assuming restricted rents for the entire Development. Assuming the value is divided
proportionally based on the number of units financed with each LIHTC transaction, the value of the
proposed 4% portion of the building would equal $13.5M. The appraisal also concludes a “Complete and
Stabilized” market value with unrestricted rents of $ 29,500,000. The acquisition basis for the project is
$7,400,000 which is supported by the land value of $7,300,000. The projected $ 6.5M permanent loan
and stabilized restricted value of $13.5 MM reflect a permanent loan LTV of 49 %. An updated appraisal
report will be required for final bond.
24
UNDERWRITING NOTES: UNIT MIX
Please see unit mix below:
Unit Type # of Units AVG Unit Size (SqFt)
1 BR 49 579
2 BR 23 795
Total 72 648
Please see affordability mix below:
% AMI # of Units % of Units
30% 4 6%
50% 58 81%
80% 10 14%
Total 72 100%
INCOME:
Gross Potential Rent (Affordable Rent Revenue) : The MLNI Underwriting Staff has underwritten
GPR/Affordable Rent Revenue based on proposed rents at stabilization. The property will consist of 72
units, with 6% of the units set aside for households earning 30% of AMI or less, 81% of units set aside for
households earning 50% of AMI or less, and 14% of the units set aside for households earning 80% of AMI
or less.
The table below illustrates the stabilized rents at the property:
Market/
Affordable
1 BR 50% Affordable No 28 579 $1,413 -$ $1,413
1 BR 50% Affordable No 9 579 $1,413 -$ $1,413
1 BR 50% Affordable No 3 579 $1,413 -$ $1,413
1 BR 80% Affordable No 9 579 $1,500 -$ $1,500
2 BR 30% Affordable Yes 4 795 $2,842 -$ $2,842
2 BR 50% Affordable No 15 795 $1,696 -$ $1,696
2 BR 50% Affordable No 2 795 $1,696 -$ $1,696
2 BR 50% Affordable No 1 795 $1,696 -$ $1,696
2 BR 80% Affordable No 1 795 $1,850 -$ $1,850
Total/Avg
Affordable
Net Underwriting
Rents / Wtd Avg.
72 648 $1,580 -$ $1,580
% AMI Subsidy
Assumption # of Units Unit Size
(Sq. Ft)
Rent/Wtd
Avg.
Utility
AllowanceUnit Type
25
NET OPERATING INCOME:
The MLNI Staff has underwritten the property’s NOI to $562,962 which supports a permanent mortgage
of $6,575,000 with an amortizing DSCR of 1.16x in Year 1.
Vacancy: The MLNI Staff has underwritten the property’s vacancy to 10% (5% Vacancy and 5% collection
loss).
Effective Gross Income (EGI): The EGI has been underwritten to $ 1,228,673 or $17,064/unit . The
developer has assumed an increase in LIHTC rents at a rate of 2% per year.
RENT COMPARABLES
DCHFA staff reviewed the Appraisal provided by Novogradac and Company completed in September 5 th,
2023. Please note that the 30% AMI units were excluded from this analysis given they are Local Rent
Supplemental Program (LRSP) units whose rents are determined by the District of Columbia Housing
Authority (DCHA). The rent comparables surveyed and conclusions of achievable rental rates for the
remaining 50% and 80% AMI units are detailed below.
The Subject will offer 58 units restricted to 50 percent of the AMI. As shown in the preceding table, five
of the comparable properties offer units restricted to 50 percent of the AMI, with four reporting achieving
the maximum allowable rents. 555 E Street SW, Gables City Vista, and Plaza West & Plaza West on K are
considered slightly superior, superior, and similar relative to the proposed Subject. Eleven 64 is also
considered slightly superior to the proposed Subject, offering slightly superior property amenities, inferior
unit features, a similar location and condition, and superior unit sizes. Golden Rule Plaza is considered
slightly inferior to the proposed Subject, offering slightly superior property amenities and location, inferior
unit features and c ondition, and superior unit sizes. As such the Development would also be capable of
achieving the maximum allowable rents at 50 percent of the AMI.
26
The Subject will offer 10 units restricted at 80 percent of the Area Median Income (AMI). As shown in the
table above, one comparable property in the study also offers units restricted at 80 percent of AMI and
reports rents below the maximum allowable limi ts. However, this comparable— Gables City Vista—is
considered superior to the proposed Subject.
Based on the Subject’s achievable market rents, the study concludes that maximum allowable rents at 80
percent of AMI are not achievable for the Subject. The study concludes an achievable LIHTC rent of $1,850
for the Subject’s one-bedroom and $2,675 for the Subject’s two-bedroom units at 80 percent of AMI. This
provides a market rent advantage of 12% compared to the concluded market rents at that time.
Agency staff reviewed updated information from CoStar on the study's rental comparables and found
that, since the study was completed, the submarket has softened. The primary market-rate comparable
that was relied upon, Union Heights, has lower rents for its one-bedroom units at $1,727 and for its two-
bedroom units at $2,050. MLNI staff have concluded on one-bedroom rents of $1,500 and $1,850, which
provide a market rent advantage for the 80% AMI units of 13% and 10%, respectively. DCHFA will require
the sponsor to commission a new market study prior to final bond. This market study will determine the
reasonableness of proposed rents for final bond underwriting.
EXPENSES
Total expenses are underwritten to $ 714,427 or $9,923/unit including reserves, trustee fees, or LIHTC
monitoring fees, and $9,246/unit without reserves and fees.
Below are expense comps provided by DCHFA’s Portfolio Asset Management Staff:
Property Name 2229 M Street Roundtree Residences Hodge on 7th 1164 Bladensburg
Audit Year N.A. N.A. 2019 2024
Year Built 1905 1905 n.a. 1905
Building Type High-rise Mid-Rise Mid-Rise Mid-Rise
Number of Units 72 91 90 65
AMI 6% @ 30% + 81% @ 50% + 14%@ 80% 21% @ 30% + 69% @560% + 10% @ 60% 20% @ 50% + 80% @ 60% 20% @ 30% + 80% @ 50%
EGI 1, 397,571$ 1,619,114$ 754,601$ 1,017,736$
Occupancy 0% 97% 95% 95%
Risk Share or Private Placement Non-Risk Share Non-Risk Share Non-Risk Share Non-Risk Share
Real Estate Tax Status Exempt Non-Exempt Non-Exempt Non-Exempt
Ward 5 7 5 #REF!
Operating Expenses
Administrative 286,966$ 408,808$ 469,705$ 298,045$
Operating and Maintenance 240,261 291,877 122,024 159,816
Utilities 115,200 87,883 137,598 54,781
Tax, Insurance, & License 72,000 67,471 103,914 86,614
Total 714,427$ 856,039$ 833,241$ 599,256$
Per Unit Per Annum
Administration 3,986 4,492 5,219 4,585
Maintenance 3,337 3,207 1,356 2,459
Utilities 1,600 966 1,529 843
Tax, Insurance, & License 1,000 741 1,155 1,333
Total 9,923$ 9,407$ 9,258$ 9,219$
Expense/Income Ratio 51% 53% 110% 59%
Distance Subject 3.1 Miles 0.3 Miles 0.5 Miles
DSCR 1.29 1.56 1.23
Tenants Services
Real Estate Taxes 151,719.00 43,881.00 44,805.00
Total Adjustments (Real Estate Taxes) 151,719.00 3,881.00 4,805.00
Total Expenses after adjustment 704,320.00 829,360.00 594,451.00
Total Expense (per unit) 9,683.41 9,215.11 9,145.40
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The DHCFA Portfolio & Asset Management (PAM) staff provided operating expense comparables for
analysis. The properties analyzed are similar to the subject in age or date of recent renovation (within 10
years), income restrictions (seniors), tenant-paid utilities, occupancy type, and property type (mid-rise
and high -rise). The three comparables are between 65-91 units, like the subject p roperty, with one
comparable consisting of 65 units. The annual, per unit operating expenses (before reserves, trustee fees,
and LIHTC monitoring fees) for the comparable set ranges from $9,219 to $9,407. The projected per unit
operating expense of $9,923/year for the subject property which is generally in line with the comparable
set.
CLOSING TIMELINE
REGULATORY REQUIREMENTS:
Regulatory Use Restriction
In accordance with IRS Section 142 requirements for tax exempt bonds, the Sponsor has elected to set aside
a minimum of 40 percent of the units for households with incomes at or below 60 percent of AMI. Pursuant
to IRS Section 42 requirements for tax credits and to maximize tax credit equity, the Sponsor has elected to
set aside 100 percent of the units at or below 60 percent of AMI for 15 years following the year the Project
is placed in service. The tax exempt bonds qualified project period will be refle cted in the Tax Regulatory
Agreement between DCHFA and the Sponsor. The 15 year tax credit compliance period and the 45 year
extended use period (which runs concurrently) will be reflected in the Indenture of Restrictive Covenants
for Low Income Housing Tax Credits between DHCD and the Sponsor.
Closing Timeline
DCHFA Initial Credit Approval/Review 04/14/2026
TEFRA Hearing TBD
Stage III Application Submitted TBD
TEFRA Mayoral Approval TBD
Completion of third party reports TBD
Construction Contract Finalized TBD
Lender Approvals TBD
Investor Approval TBD
Permits TBD
DCHFA Board Meeting Final Bond Approval TBD
Close TBD
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Minority and Local Business Entities’ Participation
The borrower will be required by the Tax Regulatory Agreement to comply with all District and federal
laws concerning contracting and procurement, including the Small, Local, and Disadvantaged Business
Enterprise Development and Assistance Act of 2005, as amended (DC Code § 2 -218.01 et seq.), the
Workforce Intermediary Establishment and Reform of First Source Amendment Act of 2011, as amended
(DC Code § 2-219.01 et seq. (First Source Act)), D.C. Law 2-156, Section 5 (Apprenticeship Program), and
will execute a First Source Employment Agreement (First Source) with the District of Columbia
Department of Employment Services (DOES) and a subcontracting agreement with the Department of
Small and Local Business Development. District Government contracts exceeding $250,000 require a 35
percent subcontracting set-aside with small businesses certified under the CBE Program.
Green Building Requirements
The Sponsor will be required to fulfill the requirements of the Green Building Act. It is anticipated that the
Project will design the project to meet Enterprise Green Communities 2020 Green Building Standards.
Inclusionary Zoning
In July 2010, the District of Columbia Zoning Commission approved emergency amendments specifying
that projects with the following characteristics will be exempt from the inclusionary zoning (“IZ”)
regulations:
• At least 80% of units must be affordable.
• Rent and sale prices must not be above maximum limits for the affordability program.
• Units must remain affordable for at least 30 years.
• A Covenant for affordability must be recorded against the properties.
Based on the above standards, the Project is exempt from IZ regulations during the 30 year period that
the DHCD LIHTC Indenture of Restrictive Covenants is enforced. However, an IZ covenant must still be
recorded. The IZ covenant will be subordinate to DCHFA and DHCD’s covenants while they are active and
will only take effect when the two covenants expire.
SUMMARY/CONCLUSION/RECOMMENDATION:
Having reviewed the Development’s budget, planned financing and operating projections, the transaction
appears to be feasible. The development consists of one eight story apartment building and a total of 72
units. It is planned that 100% of units will be set aside for reside nts making of 30%, 50% or 80% AMI or
below. The development will provide improved, affordable housing to a submarket in which affordable
LIHTC properties are experiencing very low vacancy rates; evidence of a need for the proposed affordable
housing units. The Multifamily and Neighborhood Investment underwriting staff recommends that the
Board authorizes initial credit approval of bonds in an amount not to exceed $15,400,000 to finance a
portion of the costs to build the proposed development.
29
2229 M STREET NE 4% - PROJECT INFORMATION SHEET
Item Facts
Project Type: Demolition & New Construction
Project Name: 2229 M Street NE 4%
Location: 2229 M Street NE
Ward: Seven (7)
Tax Exempt Bond Amount: Not to exceed $15,400,000
Credit Enhancement: N/A
Total Acquisition Costs/Unit: $5,791,304 or $80,435 per unit
Construction, Site work Costs/Unit: $28,465,093 or $395,349 per unit
Total Development Cost/Unit: $50,171,462 or $696,826 per unit
Evidence of Site Control: Special Warranty Deed
Mortgagor/Sponsor: Lincoln Westmoreland
General Contractor: Hamel Builders
Architect of Record: MODE4 Architecture
Management Agent: The CT Group
Sponsor’s Attorney: TBD
# Of Buildings: One (1)
# Of Units: 72
# Of Parking Spaces: 6 (Street Parking)
Current Zoning: Planned Unit Development (PUD)
Census Tract/QCT: 89.03 / Yes (Qualified Census Tract)
Land Size: 0.35 (Acres)
Building Size: 15,068 sf
30
APPENDIX
1. FINANCIAL MODEL
2. CONSTRUCTION COMPS
3. PLANNED UNIT DEVELOPMENT (PUD)