Friday, Aug. 14, 2009

Permanent Financing Approved for Wedgewood Apartments: Bonds Sold on August 4

Using a creative structure, the FCRHA and the county have successfully completed the permanent financing of Wedgewood Apartments in the Braddock district. The financing will result in $4 million being returned annually to the county to be used for affordable housing or other purposes.

The Fairfax County Redevelopment and Housing Authority (FCRHA) authorized the issuance and competitive sale of $94 million of Government Bonds (the Bonds) to provide permanent financing for Wedgewood Apartments (Braddock District).  The FCRHA also authorized the reallocation of $1,900,000 from Housing Trust Fund and $9,842,000 from the Penny for Affordable Housing Fund to pay down the interim financing of $104,105,000 which matures October 1, 2009.  Another $2,500,000 was also provided from Wedgewood net operating income.

The Bonds were sold under a competitive bid process on August 4, 2009 in the amount of $94.95 million to Merrill Lynch and Company at the interest rate of 4.646 percent (4.646%).  The bonds were highly rated as Aa2/AA+ by Moody’s Investors Service and Standard and Poor’s, respectively.  There were six bids with the highest bid being 4.922 percent. 

Wedgewood Apartments purchased by the county in 2007 to preserve 672 unit of affordable housing were at risk of loss. Going forward, the property will serve a mix of incomes: 20% at extremely low income, 60% at low income; and 20% at moderate incomes.  The “Housing Trust” units will be crated at the site and several unites will be made fully accessible for those with physical disabilities.