Affordable Housing Opportunity Fund (AHOF).
Leeland Apartments is a 15-unit, garden-style apartment building located at 112 Lee Ave. in Takoma Park. The tenant association plans to convert it into a limited equity co-op structure.
The Affordable Housing Opportunity Fund is a dedicated pool of $20 million of revolving County funds established to combine with private lending for short-term loans to acquire and preserve affordable properties, maintain affordability and protect tenants from displacement. The National Housing Trust Community Development Fund (NHTCDF) is the fund manager, coordinating applications from developers and arranging private capital to combine with Montgomery County funds to respond rapidly to opportunities.
“This is great. I am pleased that we are able to help these long-time tenants become homeowners,” said County Executive Marc Elrich. “The new Affordable Housing Opportunity Fund is designed to provide critical, readily available funding to acquire properties to preserve affordability and protect tenants from displacement. Expanding homeownership is an important goal of my administration and part of a successful affordable housing strategy. I want to thank Takoma Park Mayor Kate Stewart and Delegate Lorig Charkoudian for their efforts. I also want to recognize the pivotal role played by Mi Casa, which helped the association put the financial package together so that the tenants’ association could acquire this property.”
The City of Takoma Park, along with technical assistance provided by Mi Casa, Inc., worked with the Leeland Tenants Association to leverage the City’s Tenant Opportunity to Purchase law to purchase the property.
The tenant association’s short-term financing package to purchase the building includes the County’s $281,250 AHOF loan, a $532,000 private loan, a $1,437,500 loan from City First Enterprises and a $250,000 loan from NHTCDF. The latter two loans, arranged by NHTCDF, more than achieves the minimum three-to-one private lending match for AHOF loans. In addition, there is a $600,000 grant managed by the City of Takoma Park, which came from the State of Maryland’s Department of Housing and Community Development. The loan closing occurred on Nov. 2, at which point the tenant association took ownership of the property.
"This exciting project illustrates what we can do when local, County and State governments work with residents to help move people from renting to owning their home," said Takoma Park Mayor Stewart. "This is a model in agency collaboration, and we should expand it across Montgomery County to preserve affordable housing."
The State’s commitment also played a key role in making the process work.
"We need multiple approaches and models to ensure sufficient, inclusive and affordable housing in our community,” said State Delegate Charkoudian. “I was thrilled to work with the tenants of the Leeland in their persistent and creative efforts to transition the apartment complex into a housing co-op, thus ensuring the long-term affordability of these units. I am proud that the Maryland Department of Housing and Community Development played a critical role in the package. I look forward to continuing to work with the community, State and local government to expand affordable housing."
Leeland Apartments includes two units serving households at or below 30 percent of Area Median Income (AMI); four units serving households with income between 30 and 50 percent AMI; five units serving households with income between 50 and 60 percent AMI; and four units serving households with incomes between 60 and 80 percent AMI.
“We are proud to partner with Montgomery County, the City of Takoma Park, Mi Casa and the Leeland Tenants Association to provide this unique and first-of-its-kind financing,” said Alex Cabral, director of lending at National Housing Trust. “We really appreciated our partners’ willingness to come up with this creative approach to tenant ownership and look forward to supporting future efforts to preserve affordable housing in the community.”
Montgomery County is applying every available policy tool and financial resource to help reduce housing cost burdens by increasing the number of affordable, rent-regulated housing units; providing rent supports; and preserving current affordable housing while protecting tenants from displacement.
“DHCA participated in the successful real estate transaction that empowers tenants to purchase their property,” said Aseem K. Nigam, director of the County’s Department of Housing and Community Affairs. “We continue to work with our fund manager in leveraging the Affordable Housing Opportunity Fund to preserve housing affordability and protect tenants from displacement.”
For more information on Montgomery County’s housing program, see the DHCA Annual Report.