Bank of America to Finance Major Public Housing Revamp

The project looks to preserve a massive affordable portfolio.

San Francisco—The city of San Francisco, the San Francisco Housing Authority and their developer partners have tapped Bank of America Merrill Lynch as lender and tax credit investor for a public housing project to repair and preserve 1,400 public housing units in the city. Under the program, the bank will provide community-based nonprofit owners access to about $770 million in financing, in partnership with Freddie Mac.

The effort is part of the HUD’s Rental Assistance Demonstration Program (RAD), and pursues the city’s 2013 Re-Envisioning Public Housing goals. In response to an RFP issued by the city in March, Bank of America Merrill Lynch submitted its winning bid, which includes: about $350 million in construction financing; $300 million in low-income housing tax credit equity; $20 million in subordinated, forgivable debt; $2.2 million to provide services to public housing residents; $500,000 to Enterprise Community Partners to assist the RAD developers; $5 million for predevelopment loans; and $100 million in permanent financing from Freddie Mac.

Bank of America Merrill Lynch Community Development Banking includes the Banc of America Community Development Corp. (BACDC), which serves as a development partner and provides debt and equity financing for properties in low- and moderate-income places. It provided more than $3.2 billion in new debt and equity to more than 550 clients in 2014.

In 2014, BACDC completed more than $55 million in developments and began construction on more than $83 million in developments. The construction in San Francisco will start late this year, with completions scheduled between August 2016 and April 2017.

Bank of America invests more than $1.3 billion in more than 240 Community Development Financial Institutions in all 50 states, plus Washington, D.C., and Puerto Rico. The bank has provided $654 million from 2002 to 2014 in economic development financing in the Bay Area, and financed more than a third of LIHTC units in the city.