The Washington Housing Initiative’s Impact Pool has exceeded its target of preserving 3,000 workforce housing units across the region after assisting the owner of a Takoma Park apartment complex in refinancing their loan.
The Impact Pool provided a $6 million mezzanine debt loan to Silver Spring-based housing nonprofit Montgomery Housing Partnership to refinance the 185-unit Franklin Apartments senior housing complex at 7620 Maple Ave. in Takoma Park. The loan closed on April 12th, according to the Washington Business Journal.
“With rising rates in recent years, this refinancing allowed us to stabilize costs and preserve affordable housing for seniors and people with disabilities making 30 percent of area median income or lower,” MHP president Robert Goldman said in a statement.
MHP was recently named Washington Business Journal’s Nonprofit Developer of The Year.
MHP has closed on refinancing for Franklin Apartments in #TakomaPark 👏👏👏. This property provides critical #affordablehousing for seniors and people with disabilities. Read more about JBG SMITH Washington Housing Initiative Impact Pool funding: https://t.co/3NAghH7o55
— MHP (@MHPartners) April 16, 2024
According to JBG Smith, in addition to the Impact Pool’s contribution for Franklin Apartments, MHP secured a $26.2 million Freddie Mac loan through KeyBank and an extension of an existing $3.75 million loan using federal Community Development Block Grant funds from Montgomery County.
The Franklin Apartments, classified as a Class B property, was built in 1952 and renovated in 2011. MHP acquired the property in 2022 for $37.2 million, according to WBJ.
With this investment, JBG Smith has achieved its goal of providing financing for 3,000 workforce housing units by 2025, eight months ahead of schedule.
“The Impact Pool has surpassed what we set out to achieve – the creation and preservation of affordable homes for thousands of workers in communities throughout the Washington region, and we are proud to have reached our goal ahead of schedule and with additional funds to continue our efforts,” JBG Smith’s EVP of Social Impact Investing AJ Jackson said in a press release. “This is a moment of celebration and provides impetus to keep going. Investing at scale allows us to have a meaningful impact, and this milestone reinforces our commitment to preventing displacement and preserving affordability in rapidly changing neighborhoods vulnerable to rising housing costs. Consequently, we plan to continue to finance workforce housing through other vehicles even after the Impact Pool’s funds have been fully deployed.”
Established in 2019 by Bethesda-based JBG Smith, the WHI’s Impact Pool is a return-generating investment fund that offers low-cost loans to support the acquisition and development of workforce housing. Since its inception, the Impact Pool has invested in nine communities in the Greater Washington region, comprising more than 3,000 units. Approximately 2,200 of these units have rent caps for households earning 80% or less of the area’s median income, with affordability periods ranging from 15 to 99 years, according to information compiled from the Washington Housing Initiative’s website and reported by WBJ.
Additionally, the Impact Pool has invested in the Falkland Chase complex in downtown Silver Spring. JBG Smith had sold a portion of it last year to Arlington Partnership for Affordable Housing, which will convert it into 1,250 apartments through a phased redevelopment. The majority of these apartments will be available at affordable rates for residents earning at or below 60 percent of the Area Median Income.
“The Franklin Apartments investment is a perfect example of what we sought to accomplish when we created the Impact Pool,” Jackson said. “Montgomery County is projected to lose up to 11,000 naturally occurring affordable housing units by 2030. Our collaboration with a nonprofit owner, dedicated to the property’s preservation, will provide residents with the ability to age in place in a resource-rich neighborhood of Montgomery County.”
Photo Courtesy of JBG Smith