Name:The Willows
Location:Montgomery County, MD
Project Description: An example of affordable housing preservation is The Willows, a 195-unit complex completed in 1977. The owner had decided to terminate the Section 236 interest reduction and rental assistance payments and sell the property to a purchaser who planned to raise rents to market level. The rents were $532 for one-bedroom and $619 for two-bedroom units. HOC negotiated to purchase the property for about $35,000 per unit. HOC estimated that nearly $7 million in interest reduction and rental assistance payments remained under the state-financed Section 236 mortgage. To retain these subsidies, HOC issued $7.2 million in tax exempt bonds. HOC also created a limited partnership in which it was the sole general partner and raised $1.9 million through the syndication of Low-Income Housing Tax Credits. These funds were combined with the $7.2 million in tax-exempt bond proceeds, a $600,000 HOME loan from Montgomery County, and a General Partner loan of about $300,000 from its development fee resulting in total funding of just over $10 million. The development budget included about $1.3 million for rehabilitation, including replacing roofs, renovating the community center and laundry facilities, updating kitchens, and upgrading carpeting and lighting in the common areas. The rents were not increased, and the 156 moderate-income households and 39 low-income households living at The Willows were not displaced.
Contact: Housing Opportunities Commission of Montgomery County, 301-929-6732
Use of HOME funds: Total project development costs were $10,075,464. This includes $600,000 of HOME funds.