April 23, 2021
The Honorable Phil Mendelson, Chairman
Council of the District of Columbia
1350 Pennsylvania Avenue, N.W., Suite 402
Washington, DC 20004
Dear Chairman Mendelson:
Pursuant to D.C. Official Code 42-2702.07, and on behalf of the Board of Directors (the
Board) of the District of Columbia Housing Finance Agency (the Agency), you are hereby
notified that on April 13, 2021, the Board enacted a Supplemental Eligibility Resolution for tax-
exempt and/or taxable multifamily housing mortgage revenue bond financing in an amount not
to exceed $2,415,000 for Delta Towers (the Development). The Development is expected to
be located at 808 Bladensburg Road, NE, Washington, DC 20002, in Ward 5. After completion,
the Development is expected to consist of approximately one hundred seventy-nine (179)
residential rental units.
A copy of the Eligibility Resolution for the DC Councils review is enclosed as Exhibit A. A
detailed description of the Development and its intended benefits are provided in the
development financing memorandum enclosed as Exhibit B. If you have any questions, please
contact me at (202) 777-1600.
Sincerely,
Christopher E. Donald
Executive Director/CEO
Enclosures
 DCHFA Resolution No, 2021-05
Delta Towers
Supplemental Eligibility Resolution
DISTRICT OF COLUMBIA HOUSING FINANCE AGENCY
RESOLUTION AS TO THE SUPPLEMENTAL ELIGIBILITY OF DELTA
TOWERS FOR ADDITIONAL TAX-EXEMPT AND/OR TAXABLE
MULTIFAMILY HOUSING MORTGAGE REVENUE BOND FINANCING
WHEREAS, the District of Columbia Housing Finance Agency (the
Agency) received a request from Dantes Partners LLC, Gilbane Development
Company, Ashley Builders, and Delta Housing Corporation (collectively, the
Applicants) that the Agency provide additional bond financing for Delta Towers,
which upon completion is expected to consist
of one hundredseventy-nine (179)
residential rental units and will be located at 808 Bladensburg Road, NE,
Washington, DC 20002, Ward5(the "Project);
WHEREAS, on December 1, 2017, the Agency's Board of Directors (the
Board") adopted DCHFA Resolution No. 2017-30 approving
theeligibility for the
issuance of bonds for the purposes of, among another other things, funding
housing projects and refunding bonds for the acquisition, rehabilitation,
construction, and/or equipmentfinancing of a pipeline of projects and declaring
the Agency's official intent to issue bonds, the interest on which is excludable
from gross income for federal income tax purposes (the Original Eligibility
Resolution);
WHEREAS, the Delta Towers transaction was included in the pipeline of
the Original Eligibility Resolution(the Borrower);
 WHEREAS, the Agency determined that the financing of the Project met
the requirements of the District of Columbia Housing Finance Agency Act, D.C.
Law 2-135, as amended, D.C. Code 42-2701.01 et sea. (the Act);
WHEREAS, on September 28, 2018, the Agency issued its District of
Columbia Housing Finance Agency Multifamily Housing Mortgage Revenue
Bonds in a principal amount not to exceed $74,415,000 to finance a portion of
Delta Towers (the Bonds");
WHEREAS, the Borrower has recently informed the Agency that due to
increased rents, thereby allowing more leverage for the Project, additional
financing is required; the Borrower requests additional financing in an amountnot
to exceed $2,415,000 through the offering of the Agency's Tax-Exempt and/or
Taxable Multifamily Housing Mortgage Revenue Bonds (the Additional Bonds")
WHEREAS, the Borrower has elected, pursuant to Section 142 of the
internal Revenue Code of 1986, as amended (the Code"), to set aside at least
forty percent (40%)oftheunits for householdsator below sixty percent (60%) of
the area median income, adjusted for family size (AMI");
WHEREAS, the Borrower is eligible for Low Income Housing Tax Credits
pursuant to Section 42 of the Code, and has elected to set aside at least one
hundred percent (100%) of the units at the Project for households at or below
sixty percent (60%) of AMI; and
WHEREAS, this resolution (the Supplemental Eligibility Resolution")
supplements
the Original Eligibility Resolution in orderto recommend the
issuanceofthe Additional Bonds on parity with or subordinate to the Bondsin an
amountnot to exceed $2,415,000, in one or more series, for the benefitofthe
Borrower.
NOW THEREFORE, BE IT RESOLVED by the Board of Directors of the
Agency (the Board that:
1. Pursuantto the Original Eligibility Resolution, the Board previously
determined that the Project and financing by the Agency will
meet the requirementsofthe Act.
Final approval of any additional financing pursuantto this
Supplemental Eligibility Resolution shall be subject
to such terms,
conditions and documentation acceptable or deemed necessary by
the Agency.
. This reservation of volume cap in the additional amount of
$2,415,000 to the extent available to the Agency, is for a period of
twelve (12) months which period may be extended at the sole
discretion of the Board.
Adoption of this Supplemental Eligibility Resolution shall not
constitute a commitment from the Agency to issue the Additional
Bonds or to provide additional financing forthe Project.
The Executive Director/CEO is authorized to undertake such
actions as are required to be taken pursuant to the Act and the
regulations of the Agency, including the selection of bond
professional services.
6. The Executive Director/CEO is hereby authorized and directed to
send to the Chairperson of the Council of the District of Columbia
written notification of the adoption of this Supplemental Eligibility
Resolution as required by D.C. Code 42-2702.07.
7. This Supplemental Eligibility Resolution shall take effect
immediately.
8. The Original Eligibility Resolution remains in full force and effect,
except as supplemented bythis Supplemental Eligibility Resolution.
DCHFA Resolution No, 2021-05
ADOPTED ON APRIL 13, 2021
AT A MEETINGOF THE BOARD OF DIRECTORS.
ROLL CALL VOTE:
Buwa Binitie : RECUSED
Stephen M. Green : APPROVED
Scottie Irving : APPROVED
Stanley Jackson: APPROVED
HeatherHoward =: APPROVED
. Donald
the Board
EXHIBITB-Eligibility Memo
 MULTIFAMILY UNDERWRITING MEMORANDUM
Supplemental Inducement APPROVAL
DELTA TOWERS
808 Bladensburg Road, N.E (WARD 5)
Washington, DC 20002
179 UNITS
CO - DEVELOPER(S) / OWNERS:
DANTE PARTNERS LLL
GILBANE DEVELOPMENT COMPANY
ASHLEY BUILDERS
DELTA HOUSING CORPORATION
NEW CONSTRUCTION
NOT TO EXCEED $2,415,000 Delta Towers
RISK SHARE PERMANENT FINANCING
Maximum LTV: 85%/Min Debt Service: 1.15%
Rodney Dew
DATE: April 13. 2021
 Google
TRANSACTION SUMMARY:
The Multifamily Lending and Neighborhood Investments (MLNI") underwriting staff recommends the
District ofColumbia Housing Finance Agency's (DCHFA or the Agency) Board of Directors (the
Board) approve a supplemental bond inducement and authorize the issuance oftax-exempt bonds in an
amount not to exceed $2,415,000 as an increase to the HUD 50/50 Risk Share permanent loan to finance
aan increase in HAP rents since bond closing, a 4.3% inerease total the total bonds issued for this project.
The developer will be using the additional proceeds to payout a portion of its deferred fee. $2,588,631
deferred developer fee will remain to be paid out through cash flow. The additional bonds will be privately
placed by Wells Fargo with the original investor and will be priced in line with the initial issuance.
DCIIFAs Board of Directors, approved the Eligibility Resolution authorizing the issuance of taxable
and/or tax-exempt bonds or obligations as part of the Agency's Convertible Option Bond ("COB") which
cis plan
ofaction to preserveaffordable housing had Private Activity Bonds been discontinued
by recent Federal Tax Reform. Additionally, the initial credit review was approved on February 27", 2018.
The Project is an age restricted (S5+yrs of age) development, consisting of 179 units located at 808
Bladensburg Road NE (Square 32079, Lot 181) along the H Street corridorofNortheast Washington, DC.
The project delivered in late 2020 and is expected to convert in August of this year.
The previous building structure was built in 1980 and owned by Delta Housing Corporation, consisting of
a HAP contract for 149 units and is 100% occupied. The development team entered into a Joint Venture
Agreement with Delta Housing Corporation on June 6, 2016 to act as its developer and co-owner of the
project. The new building structure was an improved parking lot that served the old Delta Towers building
located on an adjacent and contiguous lot. The development strategy accomplished several things most
importantly replacing an aging building that has reached the end of its useful life. The new development
not only preserves 149 seniors units but also introduces 30 new affordable units.
2
Community amenities include laundry facilities, penthouse community room, conference room, flex
lounge. movie theatre and fitness room. Additionally, the property consists of 4,300SF of ground floor
retail. The ground floor retail has been legally separated via condo but will be ownedby the same ownership
entity as the residential portion of the building. The ground floor retail will also be financed via a third-
party lender (Industrial Bank) and will not be included in the financing or bond issuanceofthe residential
portion ofthe subject transaction.
DCIIFA has structured a springing escrow into the loan agreement with the borrower, as a result of the
HAP contract expiring 6 years prior to the maturity of the DCHFA permanent loan. The springing escrow
will be for 12 months of prineipal, interest, and MIP for the permanent loan. The escrow will spring into
place 12 months prior to the expiration of the HAP contract (2051). If the borrower has received an
extension of the HAP contract prior to 2051, then the escrow will not spring into place. The escrow will be
release upon approval of the HAP contract extension,
The capital stack will consist ofpermanent financing in the amount of$26.698.445 (DCHFA), $23,261,307
(DIICD LPT), $30,346,463 (LIITC Equity), $6,800,000 (Seller's Note), $1,860,203 (Accrued Interest
from Seller's Note) and $2,588,631 (Deferred Developer Fee). Total estimated development cost of the
project is $91,947,168 (S513,671/unit), inclusive of acquisition, hard and soft costs, developer and
finaneing fees, res ves, and escrows.
STRENGTHS / RISKS (KEY MITIGANTS):
STRENGHTHS:
1. Strong Guarantor: Gilbane Development Company will be Guarantor for the subject transaction.
Gilbane Development Company is the project development, financing, and ownership arm of
Gilbane, Inc. Developing a wide range of projects, Gilbane Development Company integrates the
various componentsofreal estate project delivery system and ownership structure and guarantees
the results. It utilizes its experience in finance, altemative transaction structure, tax, and project
management to deliver projects in a cost-effective manor while concurrently reducing occupancy
costs. Gilbane Development Company has developed in excess of $2 billion in real estate projects
throughout the United States. Completed projects include mixed-use, multi-family, student
housing, corporate headquarters, operation/data centers, distribution centers. manufacturing
facilities, schools and public facilities.
2. HAP Contract: Prior to final bond, the sponsor will have obtained approval for the assignment of
a 35-year HAP contract with rents that will be marked up to market effective the closing date.
LOAN STRUCTURE:
The project is financed through the issuanceof$44,687,617 million in DCHFA tax exempt bonds, of which,
$26,698,445 will convert o a HUD $0/50 Risk Share permanent loan at conversion. This is a $2,098,445
increase from the original loan amount, supported by the increased HUD rents that were approved in late
2020 after completion, The developer will be using the additional proceeds to payout a portion of its
3
deferred fee. At closing, the developer deferred $4,930,331 or 48.3% of total development fee. After
conversion. $2.588,631 oF 25.3%oftotal development fee will remain to be paid out through cash flow.
The additional bonds will be privately placed by Wells Fargo with the original investor and will be priced
in Line with the initial issuance.
Wells Fargo provided a 30-month construction loan with one (6 month) extension option. The construction
Joan was priced over | month LIBOR plus 190bps spread to the lender. At the endofthe construction term.
the Sponsor will use a combinationoftax credit equity and/or soft debt to repay the short-term bonds.
DCHFA is providing a $26,698,445 Level 1 50/50 Risk Share permanent loan via the Agency's parity
indenture, The loan is for 40 years with a 40-year amortization period. The transaction will have a 10-year
lockout period. a 1.0% prepayment penalty from years 10 through 15, and will be open for prepayment after
Year 15, The loan will be limited to 85.0%of the as-stabilized
s value. The MIP will be shared 50/50
between the Agency and ITUD, per the Risk Share program guidelines. The loan will not be underwritten
with a buffer, as all Risk Share loans will be priced based on current market conditions. Loan amounts and
interest rates are subject to change based on the timing of the rate lock. At the time of rate lock the loan
amount and interest rate will be updated based on the market and the agencys credit/underwriting
guidelines (85.0% LTV, 1.15x DSCR).
SUMMARY OF DEBT PRICIN
Rate Schedule
Permanent
Cost of 4.05%
Funds
DCHFA 0.55%
Servicing
MIP 0.25%
All-In 485%
Rate
DCHEFA Servicing and MIP will remain fixed from the date of the initial credit review memo through
closing.
 SUMMARY OF PERMANENT SOURCES AND USES:
a Tey
1 Mortga; $26,698,445 | Acquisition $14,956,310
DIICDlIPTE $23,261,307 | Construction $52,588,179
LIHTC Syndication Proceeds | $30.551.803 | Soft Costs $5,334,562
|Seller's Note $6,800,000 Financing $6,971,686
Deferred Developer Fee $2,588,631 | Developer Fee $10,200,504
Purchased Reserves $1,860,203 | Reserves and Escrows 31,895,927
Rooftop Reimbursement $186,779
Total Permanent Sources $91,947,168 | Total Permanent Uses 991,947,168
FINANCIAL ASSUMPTIONS:
Permanent Loan All-In Interest Rate a 4.85%
Permanent Loan Amortization 40 years
Lock Out Period 10yes
Permanent Loan Term 40 years
Minimum Amortizing DSCR (YR 3) Lis
DCHFA FEE SCHEDULE:
DCHFA Application Fee (fixed) 10,000
Financing fee (2%ofsupplemental bond amount) 41,969
Issuer's Counsel Fee (fixed) 40,000,
Bond Counsel Fee (fixed) 85,000
*LINITC fees, construction fees, and short-term bondfees not included.
SUBORDINATE DEBT:
The Sponsor received commitment from the DC Department of Housing and Community Development
(DIICD") for an HPTF loan in the amount not to exceed $23,261,307 on July 25, 2018. Loan proceeds
shall be used solely to pay for HPTF eligible acquisition costs and constructionofthe subject property. The
is required to maintain 100.0%of the rental units as affordable for at least 60 years from date that the project
is completed and receives a certificate of occupancy from the District of Columbia,
The interest rate charged on the HPTF loan will be 1.0%. Payments of principal and interest shall be
deferred for a period not to exceed 24 months from the dateofthe loan closing. Interest shall accrue during
the deferral period only on loan funds disbursed.
The loan shall be payable in annual installments, paid solely from 75.0% of Available Cash Flow after
repayment of the deterred development fee and the seller take back note. Payments received by DHCD
shall be applied first to accrued interest and then to principal.
SELLERS NOTE:
Delta Community Partners LLC entered into a Joint Venture agreement with Delta Housing Corporation to
act as its developer and co-ownerofthe new project. The developer purchased the land for new building
for $10,300,000 in June 2016.
Delta Housing Corporation (seller) subsequently entered into a seller's note agreement with the developer
for $6,800,000.
The repayment of the seller note is for 40 years and is subordinate to the repayment of the deferred
developer fee. The seller note is inclusive of an interest rate based on the applicable fed rate (estimated at
2.95% per as of 8/15/2018). Interest shall accrue on the unpaid balanceofthe note.
TAX CREDIT STRUCTURE:
The Sponsor has selected Wells Fargo, as the low income housing tax credit (LIHTC) investor for the
subject transaction. Per the letter of intent (LOI), Wells Fargo or an affiliate of Wells Fargo, will acquire
2 99,0% ownership interest in the Project through an estimated total equity investment of $30,346,463. The
equity investment is subject to DIICD providing a projected annual allocation of $2,975,441 in credits
($29,754,410 Total 10yr Allocation). Based on the Amended and Restated Partnership Agreement,
underwriting assumes this transaction will raise equity contributions equivalent to purchase the credits at
$1.02 per $1.00 of credit.
LIHTC Calculation Acquisition Construction
Eligible Basis $0 $69,568,413
 Adjusted Basis $