NHP Foundation Secures Historic Acquisition for Affordable Housing in Montgomery County

In a significant development for affordable housing in Montgomery County, the NHP Foundation (NHPF) recently finalized its acquisition of the Hadley Germantown property. This acquisition not only marks a major milestone for the foundation but also stands as a testament to its ongoing commitment to preserving affordable living spaces in high-demand markets. Previously known as Elme Germantown, the 218-unit community is poised to become a cornerstone of affordable housing amidst the rising cost of living in the region.

Originally constructed in 1990, Hadley Germantown offers naturally occurring affordable housing (NOAH) and has undergone renovations last in 2011. One of the key aspects of this acquisition is NHPF's intent to implement restrictive covenants to keep rents affordable. The foundation plans to restrict future rents to 60% of the Area Median Income (AMI) for 50% of the units, and an additional 25% of the units will be capped at 80% AMI. This strategy is a clear demonstration of NHPF's innovative approach to maintaining housing affordability.

Nish Desai, the Acquisition Manager at NHPF, emphasized the importance of this acquisition as a means to preserve affordability within a vital corridor while simultaneously enhancing the living conditions for residents through planned renovations. "Hadley Germantown represents a strong opportunity to preserve affordability in a high-demand corridor while executing a thoughtful renovation strategy that improves quality of life for residents," Desai noted. This acquisition showcases how creative financing can aid non-profit organizations in the quest to maintain and develop workforce housing, supporting community stability from day one.

The financial structure of the acquisition utilizes tax-exempt 501(c)(3) bond financing as a key resource. KeyBanc Capital Markets served as the bond underwriter, with the Wisconsin Public Finance Authority acting as the issuer and U.S. Bank as the trustee. In addition, Urban Atlantic and Rawson Square were involved as development consultants, ensuring the management of initial property improvements, with Winn Residential stepping in as the new Property Manager. This financial setup leverages Montgomery County's Payment in Lieu of Taxes (PILOT) program, providing a full abatement of county property taxes for eligible nonprofit-owned communities, further streamlining the acquisition process.

NHPF's Senior Vice President of Acquisitions, Neal Drobenare, highlighted the significance of leveraging the foundation's AA- SP rating to secure debt at competitive rates, stating, "This project was made possible by using NHPF's AA- SP rating to leverage debt at below 4.5%." Joseph Weatherly, Chief Investment Officer at NHPF, also expressed enthusiasm over the acquisition, noting that Montgomery County has long been a strategic market for the foundation.

Immediate post-acquisition plans involve executing an extensive capital improvement program that will focus on both interior and exterior upgrades. This includes the renovation of residential units and enhancements to community spaces, ensuring that residents will benefit from improved facilities. Urban Atlantic and Rawson Square will oversee these initial improvements, reflecting a commitment not only to maintaining affordability but also to enhancing quality of life.

Brant Snyder, CEO of Urban Atlantic, voiced excitement over collaborating with NHPF, stressing the importance of affordable and workforce housing in Montgomery County by leveraging innovative financing methods. The strong fundamentals of Hadley Germantown position it well for long-term stability, particularly due to its proximity to significant employers along the I-270 Biotech Corridor, including major organizations like the NIH, FDA, AstraZeneca, and GSK.

The addition of Hadley Germantown to NHPF's national portfolio underscores the foundation's philosophy that housing goes beyond mere bricks and mortar—it serves as the foundation for opportunities, stability, and resident success. The NHP Foundation is dedicated to making meaningful contributions to the affordable housing landscape in Montgomery County and beyond, ensuring that residents have access to quality living spaces.

A brief overview of the stakeholders involved reveals the size of this undertaking. NHPF is not just a real estate corporation; it is a 501(c)(3) nonprofit established in 1989, focusing on the acquisition and operation of affordable housing, deeply engaging with community needs over three decades. The partnerships they foster with various entities aim to enhance living standards while addressing the growing demand for affordable housing in America's urban centers.

For more information about NHPF and their initiatives, visit NHP Foundation's website.