CPC, Citi Announce $250M Facility to Finance Affordable Housing
- Mar 13, 2013
Citi Community Capital has provided $250 million in financing, one of its largest single investments in affordable housing, to help create or preserve nearly 6,000 of low- and moderate-income units in New York State.
The Community Preservation Corp., a mortgage lender for multi-family affordable housing which secured the Citi financing, said approximately 3,000 of those units will be in New York City. About $100 million will be used to finance those apartments. The New York City Department of Housing Preservation and Development will provide supplemental construction and permanent financing and the New York City Housing Development Corp. will provide 10 percent credit enhancement.
CPC officials said the partnership was formed to help finance affordable housing projects that often are not eligible for traditional financing, such as those that are in bad physical condition in underserved markets.
A portion of the $250 million will also be used for the Storm Recovery Loan Fund, a pilot program to provide up to $40 million in low-cost loans to owners of multi-family properties impacted by Hurricane Sandy. That loan fund was launched in December by New York City, CPC and Citi. It combines HPD subsidies with CPC financing to provide loans below market rate for repairs as well as preventative measures to stop or minimize future storm damage.
“This initiative will provide much needed capital for affordable housing in communities across New York City and state and reflects CPC’s renewed focus on our core mission of creating sound rental housing for lower income families and rebuilding communities,” Rafael E. Cestero, CPC president and CEO, said in a news release. “We thank our valuable partners Citi, HDC, HPD and all of CPC’s member institutions for their creative implementation of this partnership and look forward to many more years of successful, mission-driven lending in New York.”
Andrew Ditton, co-head of Citi Community Capital, said the “milestone underscores our commitment to responsible finance, and we will continue to play an active role in preserving and revitalizing the communities we serve.”
The first property to receive funding from the Citi financing deal is 539-541 East 147th St. in the Bronx, which includes two occupied 10-unit buildings owned by Workforce Housing Advisors, a for-profit affordable housing development company that specializes in preserving distressed multi-family buildings in the New York City area. WFHA is getting a total of $4 million to renovate the buildings with $1.59 million in a construction and permanent loan from CPC and Citi and HDP adding $2.4 million in City Capital funds.
The Citi funding will be used for Mayor Michael Bloomberg’s New Housing Marketplace Plan, a multi-billion dollar program to finance 165,000 units of affordable housing by the end of 2014.
“We are proud to put our resources and expertise into play, backing the investments made possible by this credit facility,” HDC President Marc Jahr said in the release.
Jahr credited CPC and Citi with being partners in increasing and improving the amount of affordable housing in New York City.
HDP Commissioner Mathew M. Wambua said more than $21 billion has been invested so far, creating or preserving 144,700 affordable homes.
“It’s obvious that the commitment of our private and non-profit partners is essential to the mission of protecting our tenants and stabilizing our neighborhoods,” he said.
A $67 million rental building going up in Greenpoint, Brooklyn, is an example of the affordable units being created across New York City under the mayor’s New Housing Marketplace Plan. Domain Companies received several below-market interest rate loans from the HDC and Goldman Sachs for the project that is expected to be completed in late 2014.
Citi Community Capital isn’t just funding affordable housing projects in New York. The bank recently agreed to provide construction loan financing to a $120 million, 19-story, 271-unit apartment building in downtown Los Angeles. Developer Related California broke ground in January on the project that will contain 20 percent affordable units.