Affordable Housing Finance

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NYC Targets Unsold Condos, Stalled Projects

AFFORDABLE HOUSING FINANCE • October 2009

UNSOLD CONDOMINIUMS, unrented apartments, and stalled construction sites will be turned into affordable housing under a new program launched by the New York City Department of Housing Preservation and Development (HPD).

Officials hope that as many as 400 affordable units will be created under the $20 million Housing Asset Renewal Program (HARP).

The program seeks to stabilize neighborhoods that have been most affected by the economic downturn while providing fresh opportunities to create affordable housing, says HPD Commissioner Rafael E. Cestero.

In order to be eligible for funding, a proposed project must be a completed, or partially constructed, unoccupied residential building in New York City, where, due to market or construction conditions, the owner is unable to complete construction or to sell or rent a sufficient number of units to meet private lending requirements.

HARP funding is intended to convert market-rate units to affordable units and enable the owner to complete construction and/or rent or sell the units. Applicants must agree to restrict rents or sales prices for a minimum of 50 percent of the dwelling units in return for HARP subsidy and/ or permanent financing.

For projects that propose affordable rental housing, a preference will be given to those that require a HARP subsidy of less than $75,000 per affordable unit. The proposal must reflect rents that are affordable to households with incomes at or below 130 percent of the Department of Housing and Urban Development Income Limits (HUD ILs)—$99,800 for a family of four or $69,900 for an individual. Permanent first mortgage financing must be from either private institutional lenders or the New York City Housing Development Corp. (HDC).

Homeownership projects will also be considered for financing, with a preference given to those that require a HARP subsidy of less than $50,000 per affordable unit. The homes must be affordable to households with incomes at or below 165 percent of the HUD ILs.