THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2018 and 2017
December 31, 2018
Net balance
Level 1
Level 2
Level 3
Interest rate swap contracts
$
-
$
1,734,349
$
-
$
1,734,349
December 31, 2017
Level 1
Level 2
Level 3
Net balance
Interest rate swap contracts
$
-
$
2,100,592
$
-
$
2,100,592
On a recurring basis, the Organization measures its interest rate swap contracts at their estimated fair value. In determining the fair value of the interest rate swap derivatives, management uses the present value of expected cash flows based on market observable interest rate yield curve commensurate with the term of the instrument. The Organization incorporates credit valuation adjustments to appropriately reflect both the Organization’s nonperformance risk and that of the respective counterparty in the fair value measurement. The credit valuation adjustments utilize level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by either the respective counterparty or the Organization. However, management determined that as of December 31, 2018 and 2017, the impact of the credit valuation adjustments were not significant to the overall valuation of the swaps. As a result, the fair value of the swaps is considered to be based primarily on level 2 inputs. NOTE 13 - ACQUISITION AND DISPOSITION OF PROPERTIES The following table reflects properties acquired during the two year period covered by these financial statements:
Date
Property
Location
Units Purchase price
Funding Citibank $8.5M LISC $8.2M Bellwether $915K City of Charlotte $911K
3/14/2017 Takoma Place
Washington DC 105
$
14,000,000
5/25/2017 LaSalle at Lincoln Heights
Charlotte, NC
60
$ $
3,030,001 1,543,000
8/22/2017 Strand
Washington DC 86
District of Columbia $9.9M Bellwether $29,365,000 Enterprise Community Loan Fund $5M Enterprise Multifamily Opportunity Fund $4.95M District of Columbia $25.5M Royal Bank of Canada (RBC) $12.1M LIIF, NHPT, and Morgan Stanley $9.357M
12/28/2017
Columbia Heights Village
Washington, DC
406
$
33,000,100
2/15/2018
Woodmont Crossing
Washington DC
176
$
44,660,000
5/15/2018 Princess Anne Townhomes
Princess Anne MD 120
$ $ $
8,770,000
11/7/2018 Shore Hills *
Brooklyn, NY
558 152
149,410,000
Prudential $102.2M Bellwether $18.5M
12/21/2018 Mark Twain NHPF LLC
Chicago, IL
23,000,000
* NHPF's investment in Shore Hills is 2.995%
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