NewPoint Impact Fund I (the “Fund”) has provided $13.3 million in 501(c)(3) bond financing to facilitate the acquisition, rehabilitation, and recapitalization of Ridgecrest Apartments Phase II, a 128-unit affordable housing community located in the Anacostia submarket of southeast Washington D.C.
The borrower is The NHP Foundation (“NHPF”), a New York-based not-for-profit developer that specializes in affordable housing. NewPoint Real Estate Capital (“NewPoint”) Senior Managing Director Bryan Dickson arranged and structured the tax-exempt construction-to-permanent phased bond financing through the NewPoint Impact platform. The transaction represents the inaugural residential rehab financed by the District of Columbia’s Revenue Bond program supported through a tax-exempt 501(c)(3) bond transaction.
“This creative transaction involved a sophisticated joint effort between NewPoint, NHPF, DC Green Bank, and local agencies, including the Office of the Deputy Mayor for Planning and Economic Development, Department of Housing and Community Development, and District of Columbia Housing Authority,” Dickson said. “A willingness to explore an alternative solution in place of LIHTC resulted in a smart and efficient construction-to-perm financing that will revitalize an aging asset and create long-term affordable and supportive housing.”
The $13.3 million in Fund financing will be combined with $29.2 million in soft debt and grants from DC Department of Housing and Community Development (DHCD), including Housing Production Trust Funds (HPTF), $2.3 million in subordinate debt from DC Green Bank to execute the rehabilitation, as well as $2.2 million in deferred fees and other sources. Collectively, these resources will support long-term affordability and significant energy-efficiency improvements.
Ridgecrest Phase II was previously operated as part of the larger Ridgecrest Village, a 1951-built development that was purchased by NHPF in 2019. After recapitalization, 20% of Ridgecrest Phase II’s units will be restricted at 30% of AMI to serve as permanent supportive housing. The remaining 80% of units will be restricted at 50%, 60% and 80% of AMI per HPTF rent thresholds.
Ridgecrest Apartments Phase II is among the first rehab projects of its size to transition to fully electric energy sources, aligning with District of Columbia goals for decarbonization. The aggressive plan to enhance energy efficiency is traditionally cost-prohibitive for affordable housing communities, but made possible through the transaction’s structure and District funding.
“This closing marks a major milestone for the District of Columbia – it was funded without low-income housing tax credits and is the District’s first 501(c)(3) municipal bond issuance funded by the Office of the Mayor for Planning and Economic Development to rehabilitate residential housing,” said Pamela Lee, Assistant Vice President of Development at NHPF. “The close collaboration between public and private groups sets a new standard for successful deal execution.”
