The Corporation has entered into the following loan agreements: USDA - RD: Long-term debt instruments were provided by the United States Department of Agriculture Rural Development (USDA-RD) pursuant to its Rural Rental Housing Program under Section 515 of the National Housing Act of 1949 for Charleston Place Apartments and Yorktowne Woods Apartments (the Projects). The long-term debt instruments are secured by an interest in real and personal property and an assignment of income to be derived from the Projects. The mortgages each have a term of 50 years. The properties listed above executed obligations with USDA-RD under its Section 515 Rural Rental Housing Program. Although the loan proceeds were received and expended in prior years in connection with each property’s original construction or rehabilitation, the loans remain subject to ongoing compliance requirements throughout their full terms. As noted, the mortgage balances presented above reflect the outstanding principal balances as of December 31, 2025. For purposes of the Schedule, the loans under the Section 515 Rural Rental Housing Program are reported at their balances at the beginning of the year, which totaled $1,417,327. In addition, USDA-RD provided interest credit subsidies during the year totaling $60,066, which reduced required debt service payments by effectively lowering the interest rates charged on the loans, in some cases to as low as 1%. These subsidies are also reported on the Schedule separately as federal expenditures from the same program. HUD HOME: Long-term debt instruments were provided by the Delaware State Housing Authority (DSHA) pursuant to the Home Investment Partnership Program (HOME), on behalf of the United States Department of Housing and Urban Development (HUD) for Charleston Place Apartments, Chandler Heights, Williamsburg Manor Apartments, and Yorktowne Woods Apartments. The debt instruments are secured by mortgages on the real estate, interests in personal property, and assignments of income to be derived from the Projects. The mortgages each have a term of 30 years. The properties listed above executed obligations with DSHA, on behalf of HUD, under its HOME Investment Partnership Program. Although the loan proceeds were received and expended in prior years in connection with each property’s original construction or rehabilitation, the loans remain subject to ongoing compliance requirements throughout their full terms. As noted, the mortgage balances presented above reflect the outstanding principal balances as of December 31, 2025. For purposes of the Schedule, the loans under the HOME program are reported at their balances at the beginning of the year, which also totaled $3,081,397 since the mortgages are deferred and only require repayment from available surplus cash. HUD CAPITAL ADVANCE: Virginia Crest Village, Inc. has a 40-year noninterest-bearing capital advance from HUD, maturing on August 31, 2038. As long as the Project remains in compliance with Section 202 requirements, including the regulatory agreement and other program terms, repayment of the capital advance is deferred. If the Project fulfills these requirements through the maturity date, the outstanding balance of the capital advance will be forgiven. However, if at any time there is a default or the property ceases to meet the prescribed terms (including availability to eligible elderly individuals), the entire balance becomes due and payable, along with interest at 6.75%, retroactive to the date of the first advance. This obligation is secured by the Project’s property, a security interest in all personal property, and an assignment of rents and leases. At December 31, 2025, the outstanding principal balance was $1,990,100. Although the capital advance is fully forgivable if certain compliance requirements are met, the Project accounts for this obligation as debt in the accompanying financial statements. Because repayment is not expected to occur if the requirements are satisfied, no interest is imputed on the noninterest-bearing advance. The HUD capital advance is a forgivable government grant contingent on continued program compliance, not a conventional borrowing arrangement. ASC 835-30 exempts transactions where interest rates are prescribed by governmental agencies, and the substance of this advance is a conditional grant. The liability will remain until the conditions for forgiveness have been substantially met.
Certain properties receive project-based federal rental subsidies on behalf of eligible tenants. These subsidies cover the difference between the tenant's income-based contribution and the Project’s approved contract rent, ensuring that tenants are not required to pay more than a prescribed percentage of their adjusted income towards their housing costs. For USDA-RD subsidized properties, this assistance is provided through the Rural Rental Assistance Program. For HUD subsidized properties, the assistance takes the form of Housing Assistance Payments (HAP) from HUD's Section 8 and Section 202 Programs. During 2025, the Corporation earned $240,216 from USDA-RD and $791,187 from HUD under these programs.
The Corporation expended $50,000 from HUD under the Community Housing Development Organization (CHDO) program. This program supports qualified nonprofit developers in producing affordable housing. The funds were used to assist with pre-development and construction costs related to affordable housing projects for low-income individuals and families.