Bank of America Merrill Lynch Community Development Banking (CDB) reported providing nearly $4 billion in loans, tax credit equity investments, and other real estate development solutions to create housing for individuals, families, veterans, seniors, and the formerly homeless across the United States in 2016.
This effort included $2.7 billion in debt commitments, including $36 million in Federal Housing Administration (FHA) loans, and $1.2 billion in new equity investments. Investments were made to 12 green projects, including three LEED-certified properties.
Overall, the bank helped financed 13,200 affordable housing units in 2016, bringing the total to 196,000 housing units since 2005.
In 2016, the CDB group completed the second phase of the San Francisco Rental Assistance Demonstration (SF-RAD), the largest and most complex RAD financing in the United States to date. Over both phases, the bank provided $2.2 billion as investor and lender, which will transform nearly 3,500 public housing units at 29 properties into safe and sustainable low-income housing for more than 10,000 San Francisco residents.
The project will rehabilitate the properties by addressing critical safety issues, upgrading the living areas, and increasing the number of Americans with Disabilities Act–compliant units. The formerly public housing is now owned and managed by private entities committed to maintaining quality affordable housing. The bank also provided funding for supportive services, including referrals to case management, mental health and substance abuse, and other services.
Other significant projects that closed in 2016 include:
· St. Albans Cycle of Life—A combination of a $13.6 million construction loan and $17.8 million in low-income housing tax credits (LIHTCs) helped Trinity Associates finance 67 affordable housing units for families in Queens, N.Y. The bank also arranged $4.4 million in permanent financing. This new-construction, green project is the first affordable family development built in the St. Albans community in 20 years.
· N Street Village—In Washington, D.C., the bank provided an $8.5 million tax-exempt construction loan and $4 million in permanent debt financing for the redevelopment of 95 units of affordable multifamily and supportive housing for homeless and low-income individuals and families. In 1994, the bank provided the initial debt and equity to renovate an abandoned building that became N Street’s headquarters, where it has provided supportive services, shelter, and low-income housing.
· Maime D. Lee—Two charter schools and a community health facility comprise this Washington, D.C., project for which the bank provided $24.2 million in construction and mini permanent debt financing for the new construction and renovation of this 80,000-square-foot facility. Maime D. Lee created 700 new charter school seats, and the health center will service 15,000 dental and medical patients in its first year.
· Lotus Village—Nearly $11 million of New Markets Tax Credits from the bank helped fund new construction for a 100,000-square-foot comprehensive homeless services facility for families, women, and children in Miami. It will consist of a shelter with 140 units for up to 500 women, youths, and children; a wellness center, including therapy rooms, daycare and playground; a neighborhood health clinic; a working classroom kitchen; a salon; an art and activities lab; a yoga and meditation room; and a pavilion, dining, and social activities.
“Our goal is to provide our clients the right combination of financial tools to best serve the individual needs of their projects,” said Maria Barry, a Bank of America Merrill Lynch Community Development Banking executive. “In 2016, we expanded our permanent debt platform to include a number of proprietary long-term financing products to provide our clients seamless execution.”
Bank officials said they gained momentum on its FHA multifamily lending platform in 2016, underwriting a variety of transactions across the country, with a significant concentration along the East Coast. The bank has been pairing its FHA execution with LIHTC equity and equity bridge loans to provide a streamlined execution for borrowers.
In 2016, CDB celebrated the 25th anniversary of its Bank of America Merrill Lynch Low-Income Housing Challenge (LIHC). The LIHC has continued its goal to inform, educate, and attract the next generation of affordable housing professionals. Teams included undergraduate and graduate students from eight universities in Arizona, California, Oregon, New York, and Washington. The LIHC has resulted in actual housing developments based on proposals created during the competition, fostering future talent while supporting CDB’s commitment to providing quality, affordable housing.
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 communities across the country. In 2016, BACDC was a development partner in affordable housing projects with a total cost of $159 million, including $39 million in completed projects, $73 million under construction, and more than $47 million in new developments.