Plans for a 137-unit affordable housing development in Hyattsville, Maryland, took a major step forward.
Walker & Dunlop announced it has arranged $40.5 million in debt and equity for the construction of The Highlands, which will be home to residents 62 and older. The financing was arranged on behalf of Community Housing Initiative (CHI) and its partner, First Baptist Church of Highland Park.
The project will be developed on the existing church campus, which has been subdivided to create a separate tax parcel. The Highlands will feature one- and two-bedroom apartments, all of which will be income-restricted. Five units will be reserved for households at 50% of the area median income (AMI), while the remaining 132 units will be restricted at 60% of the AMI.
“We are pleased to help provide seniors in the DMV region with safe, affordable, and comfortable housing,” said Joe Byrne, vice president at CHI. “By keeping rents affordable, the property is expected to maintain long-term occupancy, minimize turnover, and provide a stable, welcoming community for its residents.”
The Highlands will be financed with an “unfunded forward” Freddie Mac TEL (tax-exempt loan), including a taxable tail, serviced by Walker & Dunlop. The permanent loan is structured as a 30-month forward commitment with a 15-year term and 40-year amortization. Walker & Dunlop also syndicated $12.3 million in 4% low-income housing tax credit equity from United Bank, with acquisition and construction financed through short-term tax-exempt bonds and a bridge loan from the bank.
P.J. McDevitt, managing director of Walker & Dunlop Affordable Debt, arranged the debt, and Macy Kisilinsky, senior managing director of Walker & Dunlop Affordable Equity, arranged the debt placement and equity syndication for the project.
“This transaction highlights the flexibility of the Freddie Mac TEL product, allowing us to pair a traditional construction loan with long-term permanent financing and incorporate LIHTC equity to close the funding gap and optimize the capital stack under affordable housing constraints,” said McDevitt. “We are proud to deliver creative financing solutions that meet our clients’ needs and help bring much-needed housing to the community.”
Additional subordinate financing will be provided by Prince George’s County Housing Investment Trust Fund and the Maryland Department of Housing and Community Development.