Citi Provides $250M Financing for New York Affordable Housing
By Dees Stribling, Contributing Editor
New York—The Community Preservation Corp. (CPC), a mortgage lender specialist in the multifamily affordable housing space, has secured $250 million in financing from Citi for the construction, rehab and preservation of affordable housing in New York (state and city). The financing represents one of Citi’s largest one-time investments in affordable housing.
Of the $250 million total, $100 million will be set aside for the creation or preservation of affordable housing in New York City. For these projects, the New York City Department of Housing Preservation and Development (HPD) will provide supplemental construction and permanent financing, while the New York City Housing Development Corp. will provide 10 percent credit enhancement.
The funding will help provide financing for the city’s New Housing Marketplace Plan, an initiative to finance the creation and preservation of 165,000 units of affordable housing by the close of fiscal 2014. The plan employs public-private partnerships in which public funds have leveraged $3.43 for every $1 invested.
Another portion of the $250 million in financing will also support the Storm Recovery Loan Fund, a pilot program to provide up to $40 million in low-cost loans for the repair of multifamily buildings damaged by Hurricane Sandy. Building owners can put the funds toward resiliency measures, such as installing state-of-the-art heating and electric plants repositioned to withstand the next storm by being located on higher floors and/or in waterproof compartments.
The fund’s focus on mitigation will decrease the cost of recovery and reduce the destructive impact of future storms. It will also promote improvements to conserve energy and save money over the long term. The new fund blends a subsidy from HPD with CPC financing to provide loans that are below market rate, allowing owners to make needed repairs in the aftermath of Sandy.