CONTENTS
CONTINUOUS GROWTH IN AFFORDABLE HOUSING
DCHFA STAFF
OUR AGENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 MESSAGE FROM BOARD CHAIRMAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 MESSAGE FROM EXECUTIVE DIRECTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 DCHFA STAFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 MULTIFAMILY HOUSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 PROJECTS DELIVERED IN FY 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 INDUSTRY HONOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 SINGLE-FAMILY HOMEOWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 DC OPEN DOORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 MORTGAGE CREDIT CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 HOMESAVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 COMPLIANCE AND ASSET MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 AUDITOR’S LETTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 FINANCIAL REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
CONTINUOUS GROWTH IN AFFORDABLE HOUSING • DCHFA FY 2016 ANNUAL REPORT • 1
OUR AGENCY
Since 1979, The District of Columbia Housing Finance Agency has been expanding homeownership and rental housing opportunities in Washington, D.C. The fulfilment of DCHFA’s mission is just as critical today as it was when the Agency was created nearly 40 years ago. The availability of quality affordable housing and the number of rental units large enough for families has declined. The Agency’s approach is to invest in the housing needs of several segments of the District’s population. Our Single Family Programs division provides mortgage assistance programs for people that wish to become homeowners, foreclosure prevention and real property tax relief for those struggling to retain their homes. The Public Finance unit funds multifamily developments that are transforming communities by redeveloping existing structures or building new developments that will provide quality rental units at affordable rates. Compliance and Asset Management monitors multifamily developments financed by DCHFA to ensure that the Agency’s housing standards are being upheld at properties it has invested in.
The District of Columbia Housing Finance Agency annual report for the fiscal year ending September 30, 2016, is respectfully submitted to: The Honorable MURIEL BOWSER Mayor of the District of Columbia The Honorable PHIL MENDELSON Council Chairman of the District of Columbia The Honorable KENYAN MCDUFFIE Council Chair Pro Tempore (Ward 5) The Honorable ANITA BONDS Councilmember At-Large The Honorable DAVID GROSSO Councilmember At-Large The Honorable ELISSA SILVERMAN Councilmember At-Large The Honorable ROBERT WHITE Councilmember At-Large The Honorable BRIANNE NADEAU Councilmember, Ward 1 The Honorable JACK EVANS Councilmember, Ward 2 The Honorable MARY M. CHEH Councilmember, Ward 3 The Honorable BRANDON T. TODD Councilmember, Ward 4 The Honorable CHARLES ALLEN Councilmember, Ward 6 The Honorable VINCENT L. GRAY Councilmember, Ward 7 The Honorable TRAYON WHITE Councilmember, Ward 8
DCHFA Board of Directors BUWA BINITIE, Chairman STEPHEN M. GREEN, Vice Chairman STANLEY JACKSON, Member BRYAN “SCOTTIE” IRVING, Member SHEILA MILLER, Member TODD A. LEE, Secretary
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The Agency uses social media to maintain an active online presence. It allows for engagement and the sharing of information on DCHFA’s programs, developments and activities as well as the sharing of housing industry news. The Agency is active on Facebook and Twitter and there are accounts for DC Open Doors on both platforms as well.
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OUR AGENCY
FY 2016 Headlines
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OUR AGENCY MESSAGE FROM BOARD CHAIRMAN BUWA BINITIE
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It has been another year of continuous growth in affordable housing and homeownership at DCHFA. During fiscal year 2016 this Agency invested in the construction or preservation of 2,090 units through our Public Finance unit. The Single Family division’s DC Open Doors mortgage loan program facilitated the purchase of 205 homes in the District by providing $61,186,551 in mortgage loan financing. Single Family Programs also launched the Mortgage Credit Certificate program, providing another incentive to District homebuyers and the HomeSaver program was awarded an additional $8 million from the U.S. Department of the Treasury’s Hardest Hit Fund to help people save their homes from foreclosure. For the second year, I hold the honor of chairing this Agency’s Board of Directors. As DCHFA continues to meet the needs of the District’s expanding population. The U.S. Census Bureau reported that the City has its largest number of residents in 40 years. We all welcome this growth in our dynamic City, yet the effect is that housing inventory has decreased while home prices and rental rates have increased, as the demand for housing continues to climb. As a developer of affordable and workforce housing, I am passionate about and also personally share DCHFA’s mission of addressing the shortage of affordable housing in the District of Columbia. Mayor Muriel Bowser made affordable housing a top priority of her administration when she took office in 2015. Through the $100 million the mayor has allocated to the Housing Production Trust Fund, she has made an unprecedented investment to ensure that existing affordable housing is retained and new below-market rate housing is constructed throughout the District. This level of commitment has been heralded nationally by housing advocates and city leaders grappling with the same issue of how to maintain affordability. On behalf of the Board of Directors we commend DCHFA’s executive director and staff for being an active part of the solution to maintain and create economically diverse communities in the District of Columbia.
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OUR AGENCY MESSAGE FROM EXECUTIVE DIRECTOR TODD A. LEE
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The District of Columbia Housing Finance Agency marks another stellar year in financing affordable housing. In Fiscal Year 2016 the Agency, consistent with Mayor Muriel Bowser’s priority for affordable housing invested $294,735,000 to create and preserve 2,090 units of affordable housing across the District of Columbia. It is a fantastic start to my tenure as DCHFA’s Executive Director. I know first-hand that Washington, D.C.’s citizens desire and deserve quality affordable housing. I began my real estate finance career more than 20 years ago here in the City where I was born and have watched it transform from a place with a declining population to now a city with an exploding population. At the 2016 Washington DC Economic Partnership’s (WDCEP) Annual Meeting, Mayor Muriel Bowser stated during her remarks, “This is not your grandfather’s Washington.” This statement is backed by very impressive statistics often touted by Brian T. Kenner, Deputy Mayor for Planning and Economic Development (DMPED). D.C. is the top city for job growth (10,000 per year) and is among the top 10 startup regions in the country. In 2016, WDCEP reported residential development in the City has been at record setting levels for the past three years. Our City has made great strides yet with prosperity comes challenges for those that need affordable housing; the people that weathered the City’s lean years and got us to this current state of prosperity. DCHFA’s strategy is to absolutely support Mayor Bowser’s housing plan. We as an Agency are fortunate to serve the community in a city that has committed substantial resources to affordable housing. We are not alone in our mission to stimulate and expand homeownership and affordable rental housing opportunities in Washington, D.C. Our success is hugely driven by the fact that we have an active affordable housing development community as well as an Administration and City Council committed to housing all residents as evidenced through the $100 million dollars allocated annually to the Housing Production Trust Fund. Mayor Bowser’s continual commitment to finance new construction and preservation of affordable housing is the largest per-capita investment in affordable housing of any other state, according to DMPED. We are fortunate to work in an evolving and dynamic, world class City where DCHFA is committed to funding housing opportunities where citizens at all economic levels may continue to call D.C. their home.
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OUR AGENCY
All of DCHFA’s staff members contribute to advancing the Agency’s mission of providing and preserving affordable rental housing and home ownership opportunities in the District of Columbia. DCHFA’s Board of Directors supplies leadership to the Agency’s staff in all of its endeavors. FY 2016 DCHFA BOARD OF DIRECTORS
BUWA BINITIE, CHAIRMAN
STEPHEN M. GREEN, VICE CHAIRMAN
STANLEY JACKSON, MEMBER
BRYAN “SCOTTIE” IRVING, MEMBER
SHEILA MILLER, MEMBER
TODD A. LEE, SECRETARY
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OFFICE OF EXECUTIVE DIRECTOR Todd A. Lee EXECUTIVE DIRECTOR W. David Watts ASSOCIATE EXECUTIVE DIRECTOR Fran D. Makle DEPUTY EXECUTIVE DIRECTOR Nkosi Bradley DIRECTOR, GOVERNMENT AFFAIRS Yolanda McCutchen PUBLIC RELATIONS MANAGER Karen Harris EXECUTIVE ASSISTANT
OFFICE OF ADMINISTRATION Heather Hart HUMAN RESOURCES OFFICER Jacqueline Reid PROCUREMENT OFFICER Thurston Ramey BUSINESS PROCESS MANAGER Marcus Thompson FACILITIES MANAGER Joseph Brown RECORDS COORDINATOR Connell Young RECEPTIONIST
OFFICE OF THE GENERAL COUNSEL Maria K. Day-Marshall* GENERAL COUNSEL Michael Winter DEPUTY GENERAL COUNSEL Tracy Parker ASSOCIATE GENERAL COUNSEL Daniel Nuñez ASSOCIATE GENERAL COUNSEL Lillian Johnson RECORDS ADMINISTRATOR
PUBLIC FINANCE Anthony Waddell* DIRECTOR Martin Lucero DEVELOPMENT OFFICER Carolyn (Carrie) Fisher DEVELOPMENT OFFICER Soheila (Sue) Ghazizdeh CONSTRUCTION ENGINEER MONITOR Birol Yilmaz CONSTRUCTION ENGINEER MONITOR Patience Dean* DEVELOPMENT ANALYST Bobvala Tengen DEVELOPMENT ANALYST Robin Moore* ADMINISTRATIVE ASSISTANT Kelley Brown LOAN ADMINISTRATIVE ASSISTANT
DCHFA Staff OFFICE OF THE CHIEF FINANCIAL OFFICER Yvette Downs CHIEF FINANCIAL OFFICER Tatsiana Kurlovich* CONTROLLER Pi Tao Hsu TREASURER Yong Ki Kim* ACCOUNTING MANAGER Shujoen (Jim) Lin* FINANCIAL ANALYST MANAGER Seyoum Gizaw BOND ACCOUNTANT Gloria San-Gil* AP AND PAYROLL ACCOUNTANT Abiy Tamrat GENERAL LEDGER ACCOUNTANT Brooks Harrison PROJECT LEDGER ACCOUNTANT Valencia Anderson ACCOUNTING CLERK
SINGLE-FAMILY PROGRAMS Lisa G. Hensley DIRECTOR William Milko DEPUTY DIRECTOR Deborah Jones SINGLE FAMILY PROGRAM MANAGER Chanita Haughton LOAN PROCESSOR Sherray Gibson ADMINISTRATIVE ASSISTANT
COMPLIANCE AND ASSET MANAGEMENT Risha Williams DIRECTOR Jeree K. Turlington* ASSET MANAGER Jelani Whitt ASSET MANAGER Jacqueline Langeluttig LOAN SERVICER Fredericka Earle COMPLIANCE COORDINATOR
An asterisk (*) indicates someone who is no longer employed by the Agency, but who was employed during FY 2016.
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MULTIFAMILY HOUSING
Multifamily FY 2016 Highlights
DCHFA issues tax-exempt housing mortgage revenue bonds to lower a developer’s costs of acquiring, constructing and rehabilitating multifamily rental housing. The Agency offers private for-profit and non-profit developers low-cost construction and permanent financing that supports the new construction, acquisition, and rehabilitation of affordable rental housing in the District.
In Fiscal Year 2016, DCHFA issued $294,735,000 in bond financing for the development or redevelopment of 2,090 affordable housing units in Wards 1, 2, 4,5,6,7 and 8. In addition to the tax exempt financing, DCHFA underwrote $188,982,442 in low income housing tax credit equity (LIHTC) to finance these projects.
Projects Financed in FY 2016 • Archer Park (new construction) • Bowen Flats (new construction) • Fort Chaplin (rehabilitation) • Homestead Apartments (rehabilitation) • Langdon Apartments (new construction) • N Street Village (rehabilitation) • Parkchester Apartments (rehabilitation) PLAZA WEST • Plaza West (new construction) • Pomeroy Gardens Apartments (rehabilitation) • Portner Flats (preservation) • SOME Benning (Conway Center) (new construction) • St. Stephens (new construction) • The Atlantics (Atlantic Gardens and Atlantic Terrace) (rehabilitation) • The Beacon Center (new construction)
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FY 2016 Development Projects
Projects Delivered in FY 2016 Brightwood Portfolio
(NEW CONSTRUCTION AND REHABILITATION)
The Brightwood Portfolio consists of the rehabilitation of 140 units within The Concord, The Valencia and The Vizcaya apartment complexes, all located in the Brightwood neighborhood of Northwest, D.C. The tenants associations for each building exercised their rights under the Tenant Opportunity to Purchase Act (TOPA) to ensure that the rents in the building remain affordable and that they could remain in their homes past renovation. Ninety percent of the units are reserved for residents earning 60 percent or less of the area median income (AMI). Ten percent of the units are unrestricted in order to avoid displacing current residents whose incomes are over the 60 percent AMI level.
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MULTIFAMILY HOUSING
The Concord The Concord consists of two buildings that were originally built in 1939. The building underwent a substantial renovation and seven additional units were constructed in the basement of the buildings, increasing the total unit count to 88.
The Valencia The Valencia is a single building that was originally built in 1937. The renovation of the building included the construction of two new units in the basement, increasing the unit count to 34.
The Vizcaya The Vizcaya was built in 1937. All of its units were renovated and one additional unit was constructed in the basement, increasing the total unit count to 18.
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FY 2016 Development Projects Metro Village (NEW CONSTRUCTION)
Metro Village addresses the need for affordable housing in Ward 4’s Takoma Park neighborhood. Takoma Park is undergoing an increase in retail activity as well as higher residential rents and home sale prices. Metro Village, named for its close proximity to the Takoma Park Metro station, combines affordable and market rate development in a transit oriented, amenitized, mixed-use and mixed-income community. Metro Village consists of two separate five story buildings with 150 units. Eighty percent of the units are leased at or below 60 percent of the area median income. The remaining units (20 percent) are priced at market rate. This development with high tech amenities gives District families and individuals another option for quality affordable apartments. At the time of its ribbon cutting in August 2016, Metro Village was fully leased! Regardless of income D.C. residents should have the option to live in a community like Metro Village with the most sought after housing amenities (access to public transportation, parking and a walkable community with retail options) available to people at a range of income levels.
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FY 2016 DEVELOPMENT PROJECTS
The Yards Arris Apartments (THE YARDS PARCEL N) (NEW CONSTRUCTION)
The Yards Arris Apartments is a component of the redevelopment of the former Southeast Federal Center site located along the Anacostia River in Ward 6. Within the 327 unit building, 80 percent of the apartment homes are offered at market rate and 20 percent, are reserved for individuals or families making 50 percent or less of the area median income. The 66 affordable units are interspersed with market rate units throughout the residential portion of the building, creating an inclusive mixed-income community in a now vibrant part of the City. The Yards Arris is located near Nationals Park and is only four blocks from the Navy Yard Metro Station. This is also a mixed-use development with 20,000 square feet of retail space. The Yards Arris is the third component of the Southeast Federal Center site redevelopment in which DCHFA made an investment. In 2010, the Agency financed the acquisition and adaptive rehabilitation of Foundry Lofts (The Yards M/160 Building) and in 2013 provided acquisition and construction financing for Twelve12 (The Yards D building).
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FY 2016 Development Projects
7611 & 7701 GEORGIA AVENUE APARTMENTS
Six projects financed by DCHFA delivered in FY 2016 In addition to the three projects profiled in this report, the following developments were also completed:
7611 & 7701 Georgia Avenue Apartments (REHABILITATION)
Barrow Milestone Residential (2321 4TH STREET NE) (NEW CONSTRUCTION) BARROW MILESTONE RESIDENTIAL
Edgewood Commons (EDGEWOOD TERRACE) (REHABILITATION)
EDGEWOOD COMMONS
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FY 2016 DEVELOPMENT PROJECTS
Housing Industry Honor The National Association of Local Housing Finance Agencies awarded a DCHFA financed development, The Hodge on 7th, the Multifamily Excellence Award in FY 2016. The Hodge on 7th (The Hodge) is a $27.64 million multifamily senior residence located at 1490 7th Street NW, Washington, D.C. The project was financed in part by the District of Columbia Housing Finance Agency through its issuance of long and short-term tax exempt bonds ($13 million) and equity raised through the syndication of four percent low income housing tax credits ($11.3 million). The building is an integral part of the City Market at O Street. The approximately one million square foot master development built around the National Register of Historic Places, designated O Street Market, includes roughly 90,000 square feet of retail space, a hotel, 90 affordable senior residential units ( The Hodge), 400 market rate residential rental units, and an additional 145 residentowned housing units. The Hodge is an important example that reflects the larger development’s commitment to affordability, resident age diversity and it is the epitome of creative financing! The development at the City Market is emblematic of critical urban revitalization and economic development.
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SINGLE FAMILY PROGRAMS
Single Family Programs
DC Open Doors FY 2016
DCHFA’s Single Family Programs division manages all of the Agency’s homeownership programs with the goal of expanding and retaining homeownership opportunities in the District through the DC Open Doors mortgage loan programs, down payment assistance loans, the Mortgage Credit Certificate program and the HomeSaver Foreclosure Prevention Programs.
DC Open Doors FY 2016 Highlights Funded 205 mortgage loans in an amount of $61,185,437 along with $1,715,192 in down payment assistance loans for a total of $62,900,629 in financing. Number of Total Closed Loans: . . . . . . . . . . . 205 Average Purchase Price: . . . . . . . . . . . . . . . . $311,238 Average Loan Amount: . . . . . . . . . . . . . . . . . $298,465 Average Age of Prospective Homebuyer: . . . . 35 Average Number in Household: . . . . . . . . . . . 1 Average Borrower Income: . . . . . . . . . . . . . . $84,903
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SINGLE FAMILY PROGRAMS
DC Open Doors Mortgage Assistance Loans by Ward
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Mortgage Credit Certificate Program
In June 2016, DCHFA’s Single Family Division launched the Mortgage Credit Certificate (MCC) program. The Mortgage Credit Certificate (MCC) is another incentive for home purchasers in the District of Columbia; A Mortgage Credit Certificate provides qualified borrowers the ability to claim a Federal Tax Credit of 20 percent of the mortgage interest paid during each calendar year. The remaining 80 percent of mortgage interest paid for that year may still be claimed as a tax deduction. A tax credit has the potential to put more money in the homeowner’s pocket than a tax deduction alone.
In FY 2016 DCHFA issued seven MCCs in conjunction with DC Open Doors loans and five standalone MCCs.
MCC Guidelines • • • • • •
Borrowers must be first time homebuyers Must not have had an ownership interest in a principle residence within the most recent three year period Exception for residences purchased in a Targeted Area or Veteran’s utilizing a one-time exception Maximum borrower income is based upon household income, currently $131,040 (family of two or less) and $152,880 (family of three or more) Acquisition costs (sales price) may not exceed program limits, currently $589,784 (non-targeted area) and $720,847 (targeted area) Single Family residences, only (no 2-4 unit properties or co-ops)
DCHFA’s MCCs can be provided in conjunction with a DC Open Doors loan program product or other loan program products not offered through the DC Open Doors loan program.
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SINGLE FAMILY PROGRAMS
The Combined Power of DC Open Doors and the MCC DCHFA Employee Buys His First Home with DC Open Doors and the MCC DCHFA Development Analyst Bobvala Tengen bought his first home in Northeast, D.C.’s Capitol View neighborhood in 2016 with the assistance of both DC Open Doors and the Mortgage Credit Certificate programs. Bob is a native Washingtonian and grew up in Northwest, D.C. In 2016, after accepting his position at the Agency he began the search for his first home. Working in the affordable housing industry and being a lifelong D.C. resident Bob was well aware of some of the financial challenges of the current real estate market, “I estimated that my mortgage would be cheaper than the cost to rent a one bedroom apartment in the neighborhoods where I wanted to live. So I decided to make a sacrifice on location to be able to make a better investment.”
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Bob became aware of DC Open Doors while attending a real estate networking event. He inquired further about the program with DCHFA colleagues in the Single Family Programs division and was informed of the new Mortgage Credit Certificate program. Bob qualified for both programs and within 30 days he found his home, “I chose to use DC Open Doors and the MCC program because it is one of the most efficient First Time Home buying programs the city offers. The amount of time it takes to qualify for the program allowed me to be as competitive as any other homebuyer with the exception of an all cash buyer.” The collaboration between lenders and the DC Open Doors staff also impacted Bob’s experience, “I would encourage others to use the program because the participating lenders in the program are very knowledgeable and work seamlessly with the Single Family division of DCHFA.” Bob’s journey to homeownership is an example of how the knowledge of and utilization of available resources can make homeownership attainable. Owning a home can be transformative and Bob expressed how the experience transcends merely holding a deed to a dwelling, “Homeownership creates an opportunity for the transfer of wealth. Now that I am a homeowner, I will be able to transfer this wealth to future generations. I love my city and couldn’t imagine owning my first home in any other city.”
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SINGLE FAMILY PROGRAMS
DCHFA Relaunches the HomeSaver Phase I Foreclosure Prevention Program
In June 2016, DCHFA reopened the HomeSaver Phase I foreclosure prevention program. The Agency received two funding allocations totaling $8,047,933 from the U.S. Department of the Treasury’s Hardest Hit Fund (HHF). The award was used to aid eligible District of Columbia homeowners that fell behind on their mortgage payments due to unemployment or under employment retain ownership of their homes.
The HomeSaver Program has three components: Lifeline Assistance – one-time payment of up to six months of mortgage delinquency (PITIA); Applicant must be receiving unemployment benefits at the time of application or have experienced an involuntary reduction of income of at least 25 percent. Mortgage Assistance – up to 24 months of mortgage payment assistance or a maximum of $38,400 (PITIA); Applicant must be receiving unemployment benefits at the time of application or have experienced an involuntary reduction in income of at least 25 percent. Restore Assistance – for the recently employed, a onetime payment of delinquency, up to $38,400, to “catchup” mortgage payments. Applicant must have received unemployment benefits within the last six months from the date of application. 2 4 • CONT INUOU S GR OW TH I N AF FORDAB LE HOU SING • D C H F A F Y 2 0 1 6 A N N U A L R E P O R T
Applicants Borrower Eligibility Criteria • • • • • •
District of Columbia homeowners; Homeowner(s) residing in his or her primary residence; Homeowner named on the note; Homeowner(s) who is receiving unemployment benefits at the time of application or has experienced an involuntary reduction in income of 25 percent or more (Lifeline Assistance and Mortgage Assistance), or has received Unemployment Insurance payments in the past six (6) months (for Restore Assistance ONLY); Homeowner(s) who has NOT received a notice of foreclosure sale; and Homeowner(s) who is NOT in active bankruptcy.
HomeSaver Phase I HomeSaver Phase I was launched in 2010 by DCHFA as a part of the HHF initiative to provide funds to unemployed and underemployed District homeowners that were facing foreclosure. The first phase of the HomeSaver Program concluded in 2013 after the Agency committed most of the funds allotted to it by the U.S. Department of the Treasury.
HomeSaver Phase II Phase II of HomeSaver began in FY 2015 to offer tax lien relief to eligible District homeowners facing foreclosure due to delinquent real property taxes.
HomeSaver FY 2016 Highlights HomeSaver Phase I relaunched and began accepting applications HomeSaver Phase II – Tax Lien Extinguishment Program assisted 11 homeowners at risk of tax sale foreclosure with $102,332 in funding.
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COMPLIANCE & ASSET MANAGEMENT
EDGEWOOD COMMONS
DCHFA’s involvement in the developments it finances extends beyond the closing table. The Agency’s Compliance and Asset Management Division (CAM) is responsible for monitoring all multifamily developments financed by DCHFA. CAM’s primary objective is to preserve and enhance the value of DCHFA financed assets and ensure safe, clean and quality housing standards for residents that call these properties their homes. As of the end of September 2016, DCHFA’s multifamily portfolio consisted of 140 multifamily developments with a total of 19,284 affordable rental units. DCHFA’s portfolio includes all active and inactive multifamily loans and LIHTC developments for which we provide compliance monitoring and support.
BARROW MILESTONE RIBBON CUTTING
• Developments 140 • Units 19,284
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AUDITOR’S LETTER
Independent Auditor’s Report To the Board of Directors District of Columbia Housing Finance Agency We have audited the accompanying financial statements of the District of Columbia Housing Finance Agency (the “Agency”), a component unit of the Government of the District of Columbia, as of and for the years ended September 30, 2016 and 2015, and the related notes to the financial statements, which collectively comprise the Agency’s basic financial statements as listed in the table of contents.
Required Supplementary Information Management’s Responsibility for the Financial Statements Accounting principles generally accepted in the United States of America require that the Management is responsible for the preparation and fair presentation of these financial statements in management’s analysis and budgetary on pages through 13 accordance withdiscussion accountingand principles generally accepted comparison in the United information States of America; this 6includes be presented to supplement the basic financial statements. Such information, although not a part the design, implementation, and maintenance of internal control relevant to the preparation and fairof the basic financial statements, is required by the Governmental Accounting Standards Board, presentation of financial statements that are free from material misstatement, whether due to fraud or who considers it to be an essential part of financial reporting for placing the basic financial statements in an error. appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the Auditor’s Responsibility United States of America, which consisted of inquiries of management about the methods of preparing Ourinformation responsibility is comparing to express an on these financial statements based on our audits. We the and the opinion information for consistency with management’s responses to our conducted our audits in accordance with auditing standards generally accepted in the United inquiries, the basic financial statements, and other knowledge we obtained during our auditStates of theofbasic America. statements. Those standards we plan perform audit any to obtain reasonable assurance financial We require do not that express an and opinion or the provide assurance on the information about whether the financial statements are provide free fromus material misstatement. because the limited procedures do not with sufficient evidence to express an opinion or provide assurance. An auditany involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the Other Information assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s Our audits were conducted for the purpose of forming an opinion on the financial statements that preparation and fair presentation of the financial statements in order to design audit procedures that are collectively comprise the Agency’s basic financial statements. The supplemental information on pages appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness 65 93 is presented for purposes of additional analysis andopinion. is not aAnrequired part includes of the basic of through the entity’s internal control. Accordingly, we express no such audit also financial statements. Such information is the responsibility of management and was derived from and evaluating the appropriateness of accounting policies used and the reasonableness of significant relates directly to underlying accounting and other records used to prepare the basic accounting estimates made by management, as well as evaluating the overall presentation of financial the statements. Such information has been subjected to the auditing procedures applied in the audits of the financial statements. basic financial statements and certain additional procedures, including comparing and reconciling such information directly to theevidence underlying accounting and other records used to prepare the abasic We believe that the audit we have obtained is sufficient and appropriate to provide basisfinancial for our audit opinion. statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, Opinion the information is fairly stated, in all material respects, in relation to the financial statements as a whole. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Agency, as of September 30, 2016 and 2015, and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted inMaryland the United States of America. Baltimore,
December 22, 2016 Other Matters
As discussed in Note 2 to the financial statements, the Agency implemented GASB No. 72, Fair Value Measurement and Application.
4 CONTINUOUS GROWTH IN AFFORDABLE HOUSING • D C H F A F Y 2 0 1 6 A N N U A L R E P O R T • 2 7
FINANCIAL STATEMENT
DISTRICT OF COLUMBIA HOUSING FINANCE AGENCY STATEMENTS OF NET POSITION (CONTINUED) YEARS ENDED SEPTEMBER 30, 2016 AND 2015
ASSETS
2016
CURRENT ASSETS Unrestricted current assets: Cash and cash equivalents Mortgage and construction loans receivable Other receivables Accrued interest receivable Prepaid fees Total unrestricted current assets Restricted current assets: Cash and cash equivalents Mortgage-backed securities at fair value Mortgage and construction loans receivable Accrued interest receivable Total restricted current assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Unrestricted non-current assets: Investments Mortgage and construction loans receivable Total unrestricted non-current assets Restricted non-current assets: Investments held in trust Mortgage-backed securities at fair value Mortgage and construction loans receivable Loans receivable McKinney Act loans receivable Total restricted non-current assets Capital assets: Land Property and equipment Less accumulated depreciation and amortization Total capital assets, net TOTAL NON-CURRENT ASSETS TOTAL ASSETS
$
DEFERRED OUTFLOWS OF RESOURCES Unamortized deferral on bond refundings Total deferred outflows of resources
$ $
$
2015
51,035,521 2,347,015 40,912 197,294 53,620,742
$
40,169,724 75,095 2,092,988 16,450 144,508 42,498,765
150,290,693 6,102,222 68,090,519 3,890,528 228,373,962 281,994,704
158,284,283 1,211,215 33,610,178 3,245,424 196,351,100 238,849,865
3,349,229 4,980,313 8,329,542
3,426,760 4,988,427 8,415,187
51,006,017 60,436,842 974,279,886 1,967,711 2,982,470 1,090,672,926
15,040,254 74,707,470 838,052,060 2,143,605 1,738,603 931,681,992
573,000 5,798,275 (4,429,031) 1,942,244 1,100,944,712 1,382,939,416
573,000 5,723,505 (4,283,804) 2,012,701 942,109,880 1,180,959,745
224,734 224,734
$ $ $
230,521 230,521
(Continued)
2 8 • CONT INUOU S GR OW TH I N AF FORDAB LE HOU SING • D C H F A F Y 2 0 1 6 A N N U A L R E P O R T
DISTRICT OF COLUMBIA HOUSING FINANCE AGENCY STATEMENTS OF NET POSITION (CONTINUED) YEARS ENDED SEPTEMBER 30, 2016 AND 2015
LIABILITIES AND NET POSITION
2016
CURRENT LIABILITIES Current liabilities payable from unrestricted assets: Accounts payable and accrued liabilities Accrued salary and vacation payable Prepaid fees Total current liabilities payable from unrestricted assets Current liabilities payable from restricted assets: Accounts payable and accrued liabilities Project funds held for borrower and other liabilities Interest payable Loans payable Bonds payable Total current liabilities payable from restricted assets
$
TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Non-current liabilities payable from restricted assets: Bonds payable Total non-current liabilities payable from restricted assets TOTAL LIABILITIES NET POSITION Net invested in capital assets Restricted for: Bond Fund, collateral and Risk Share Program McKinney Act Fund Total restricted net position Unrestricted net position TOTAL NET POSITION TOTAL LIABILITIES AND NET POSITION
$
2015
625,272 192,814 2,172,329 2,990,415
$
513,174 311,363 1,073,816 1,898,353
44,471 119,389,068 6,848,048 8,234,840 68,808,250 203,324,677
44,472 106,502,039 6,570,677 9,037,412 34,674,393 156,828,993
206,315,092
158,727,346
1,072,113,218 1,072,113,218 1,278,428,310
925,341,022 925,341,022 1,084,068,368
1,942,244
2,012,701
30,144,621 5,863,116 36,007,737
32,659,022 7,900,345 40,559,367
66,785,859 104,735,840
54,549,830 97,121,898
1,383,164,150
$
1,181,190,266
The accompanying notes are an integral part of these financial statements.
CONTINUOUS GROWTH IN AFFORDABLE HOUSING • D C H F A F Y 2 0 1 6 A N N U A L R E P O R T • 2 9
FINANCIAL STATEMENT
DISTRICT OF COLUMBIA HOUSING FINANCE AGENCY
STATEMENTS OF REVENUES, EXPENSES AND CHANGE IN NET POSITION YEARS ENDED SEPTEMBER 30, 2016 AND 2015
2016 OPERATING REVENUES Investment interest income Mortgage-backed security interest income Interest on mortgage and construction loans McKinney Act interest revenue Application and commitment fees Other Total operating revenues
$
1,233,792 3,300,301 37,296,196 95,437 199,648 31,984,436 74,109,810
2015 $
1,143,975 4,214,679 31,573,895 234,088 288,762 17,959,823 55,415,222
OPERATING EXPENSES General and administrative Personnel and related costs Interest expense Depreciation and amortization Trustee fees and other expenses Total operating expenses
17,531,637 4,702,746 38,085,821 145,227 2,647,714 63,113,145
10,244,470 4,350,260 32,846,970 212,737 908,154 48,562,591
OPERATING INCOME
10,996,665
6,852,631
NON-OPERATING REVENUES/EXPENSES Decrease in fair value of mortgage-backed securities
(3,382,723)
CHANGE IN NET POSITION Net position, beginning of year Net position, end of year
(522,583)
7,613,942 $
97,121,898 104,735,840
6,330,048 $
90,791,850 97,121,898
The accompanying notes are an integral part of these financial statements.
3 0 • CONT INUOU S GR OW TH I N AF FORDAB LE HOU SING • D C H F A F Y 2 0 1 6 A N N U A L R E P O R T
DISTRICT OF COLUMBIA HOUSING FINANCE AGENCY STATEMENTS OF CASH FLOWS SEPTEMBER 30, 2016 AND 2015
2016
Cash Flows From Operating Activities Interest received on loans Other cash receipts Payments to vendors Payments to employees Net mortgage and construction loans principal (disbursements) / receipts Principal and interest received on mortgage-backed securities Payment for the purchase of mortgage-backed securities Other cash payments Net cash used in operating activities
$
Cash Flows from Capital and Related Financing Activities Acquisition of fixed assets Payments of bonds and long-term debt Net cash used in capital and related financing activities
37,198,931 130,936,700 (19,006,889) (4,823,996) (171,651,544) 72,869,206 (64,231,326) (85,454,873) (104,163,792)
2015
$
32,341,934 111,577,026 (10,348,668) (4,323,725) (172,483,358) 120,000,052 (84,256,364) (49,791,827) (57,284,930)
(87,912) (87,912)
(196,261) (650,000) (846,261)
Cash Flows From Non-Capital Financing Activities Interest paid on bonds and loans Proceeds from bond issuances Principal payments on issued debt and loans Net cash provided by non-capital financing activities
(38,592,941) 279,758,869 (99,442,437) 141,723,491
(33,455,936) 229,172,100 (75,190,029) 120,526,135
Cash Flows From Investing Activities Interest received on investments Sale of investments Purchase of investments Net cash (used in) provided by investing activities
1,268,355 6,620,461 (42,488,396) (34,599,580)
1,172,344 33,824,242 (24,347,551) 10,649,035
NET INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year
2,872,207 198,454,007 201,326,214
$
73,043,979 125,410,028 $ 198,454,007
(Continued)
CONTINUOUS GROWTH IN AFFORDABLE HOUSING • D C H F A F Y 2 0 1 6 A N N U A L R E P O R T • 3 1
FINANCIAL STATEMENT
DISTRICT OF COLUMBIA HOUSING FINANCE AGENCY STATEMENTS OF CASH FLOWS (CONTINUED) SEPTEMBER 30, 2016 AND 2015
Reconciliation of Operating Income to Net Cash Used in by Operating Activities Operating income Depreciation and amortization Amortization of deferred items Interest on bonds Amortization of discount on investments Provision for uncollectible interest revenue Contingent loss expense Decrease (increase) in mortgage and construction loans Decrease in mortgage-backed securities Purchase of mortgage-backed securities Decrease (increase) in fair value of investments Interest received on investments Decrease (increase) in assets: Receivables Other current assets Other receivables Increase (decrease) in liabilities: Accounts payable and accrued liabilities Prepaid items Project funds held for borrower and other liabilities Accrued interest payable Net cash used in operating activities
2016
$
10,996,665 145,227 (2,035,712) 38,592,941 17,401 (37,718) 1,708,934 (172,049,355) 6,280,106 (302,127) (20,297) (1,268,355)
2015
$
6,852,631 212,737 (1,796,410) 33,455,937 31,135 256,095 1,765,858 (172,373,113) 38,740,235 (9,410,543) (10,517) (1,172,344)
(226,019) (52,786) (254,027)
556,968 8,366 987,308
78,419 1,098,513 12,887,028 277,370 $
(104,163,792)
(247,374) 77,390 44,993,032 (212,321) $
(57,284,930)
The accompanying notes are an integral part of these financial statements. 3 2 • CONT INUOU S GR OW TH I N AF FORDAB LE HOU SING • D C H F A F Y 2 0 1 6 A N N U A L R E P O R T
Written and Edited by Yolanda McCutchen, Public Relation Manager, DCHFA Designed by James Neal and Stephen Rutgers, Azer Creative Photography by Chris Spielmann, Spielmann Studio