Loan at a Glance:
PB Hagerstown, LLC, (PB Hagerstown) a development team formed to purchase and develop Kilpatrick Woods, requested a $3,800,000 land acquisition and predevelopment loan for a planned 241-unit affordable housing Low-Income Housing Tax Credit project in Hagerstown, Maryland. PCG’s portion of the participation financing is $1,117,500 - part of a total loan of $3,635,000 with National Housing Trust as lead lender.
Project Summary:
Kilpatrick Woods will provide affordable homes to working families with incomes from $40,000 to the low $50,000s. Residents will include early career firefighters, teachers, civil servants, office managers, and industrial workers. PB Hagerstown plans to work with the Hagerstown Housing Authority to identify families on its waitlist who may meet rental requirements.
Kilpatrick Woods will construct 241 new 2-, 3-, and 4-bedroom rental homes. Sixty-seven rental homes will be reserved for families earning 30% to 50% AMI and 174 will be reserved for families earning 50% to 70% AMI. All of the homes will be deed restricted based on LIHTC guidelines.
Loan Result:
Based on 2018 Esri Demographics data, a 2019 Novogradac Feasibility Study concluded that 35.8% of renters in the Primary Market Area and 34.0% in the Metropolitan Statistical Area were rent overburdened (defined as paying over 35% of household income for rent). Due to the lower than market rental rates, this project is expected to generate a total of $42,888/month or $514,656/year rental savings for the project’s 241 households.