This article is part of the 2025 Mid-Year Housing Industry Update. Click here to read the full newsletter.
A major affordable housing development underway in Fairfax County, Virginia, is setting a new precedent for large-scale, multi-phase transactions in high-cost suburban markets. Located adjacent to the County’s Government Center, the 279-unit project now under construction combines layered financing and public land reuse in an innovative way to deliver affordable multifamily housing for residents earning up to 70% of AMI, including units set aside for households earning between 40% and 60% of AMI or less.
The development, known as Residences at Government Center II, is being constructed on underutilized but centrally located parking lot space leased from the County. The developer, Lincoln Avenue, expects that many residents will be county government workers.
On the equity side, the financing involved the use of a “quadruplet” structure, closing two twinned 4% and 9% LIHTC transactions simultaneously. This strategic move maximized tax credit equity, minimized risk, and supported efficient construction of shared assets like the parking garage.
On the debt side, tax-exempt bonds were issued by the Fairfax County Redevelopment and Housing Authority (FCRHA) to finance the 4% components of the project.
The construction-to-permanent bond financing involved a new hybrid structure whereby the security for the bonds converts from cash collateral during construction to a Freddie Mac credit enhancement agreement during the permanent phase.
Ballard Spahr served as bond counsel to FCRHA for the financing. The team included Jeff Ballard, Peter Lam, and Andrew Wang.
Additional project financing was provided by Capital One and the County.
The project demonstrates how public assets and creative financing tools can be leveraged to advance affordable housing goals in high-cost markets.
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