Affordable Housing in Arlington, Virginia

Recognizing the need for affordable housing in the Washington, D.C., area, AHC, Inc., a nonprofit developer of low- and moderate-income housing, purchased Colonial Village West (CVW), a multifamily development in Arlington, Virginia, in 1981. Built in 1930, CVW consists of one three-story brick building and eight attached two-story brick buildings. Collectively, the buildings have 70 rental units. Although AHC renovated the property shortly after its purchase, by 2001 CVW was in need of significant repair. To finance the necessary renovations, AHC secured low-income housing tax credits from the Virginia Housing Development Authority. AHC raised the capital needed for the renovations by joining forces with The Enterprise Social Investment Corporation (ESIC) and Freddie Mac. In 2001, ESIC, a subsidiary of the Enterprise Foundation that works with partners to finance and develop affordable housing in disadvantaged neighborhoods, partnered with Freddie Mac to create a $50 million tax credit equity fund for low-income housing development. ESIC, which manages the fund, purchases low-income housing tax credits from developers of affordable housing. Freddie Mac, as the fund's sole investor, receives the tax credits. AHC used this arrangement to sell CVW's low-income housing tax credits for $7 million.

The mission of AHC is twofold: to preserve the supply of affordable housing in the mid-Atlantic region, especially Northern Virginia and Baltimore, Maryland; and to ensure that properties developed or owned by AHC enhance the quality of life in the neighborhoods where they are located.

The renovation of Colonial Village West significantly improved the conditions of the low- and moderate income rental units in the development. The $50 million "Freddie Mac Equity Plus I-ESIC Fund" was critical to the success of the CVW project--support from the fund allowed AHP to invest millions of dollars to upgrade and improve the facilities, while keeping the property affordable.