Judd Levy spent four decades turning money from Wall Street investors into community development financing— from affordable home mortgages to financing for affordable housing.

“Everyone used to call him the Bond Doctor,” says Emily Youssouf, former head of New York City’s Housing Development Corp. “If you had a problem, Judd could figure out a way for it to work.”

Levy’s career has taken him from housing agencies to investment banking to mission-driven nonprofits, constantly finding new ways to finance affordable housing along the way.

In the 1970s, he served as deputy director of the New Jersey Housing and Mortgage Finance Agency. He then moved to the private sector to lead the fledgling housing finance department at Merrill Lynch. From 1978 to 1988, the housing group managed more than $50 billion in tax-exempt bonds for the affordable housing market and served as lead manager for nine state housing finance agencies ranging from New York to Hawaii.

“The municipal housing finance department at Merrill was No. 1 on the Street,” says Youssouf. In the 1980s, she worked for Standard & Poor’s, often rating bonds issues by Levy’s team at Merrill Lynch, and eventually joining that team. “He’s one of the most talented bankers I’ve ever met.”

Wrenching change struck the housing finance industry that year, when Congress wiped out many of the programs that financed multifamily housing in the Tax Reform Act of 1986. Levy could see he faced years of downsizing if he stayed at Merrill and would probably have to lay off, bit by bit, the team he had built.


Vermont days

Instead, he laid himself off, retired from Merrill Lynch, and moved to Killington, Vt., where he and his wife, Susan, bought a 19-room country inn.

“I loved running my own business—I never woke up and said, ‘I wish I was still in the bond business,’” says Levy, who, as an innkeeper, many nights in the late 1980s stayed up past 2 a.m. making muffins for the next day at the inn.

Even in his new life, however, Levy couldn’t escape affordable housing finance. A new nonprofit syndication and development company, Housing Vermont, appointed him to its board of directors. Housing Vermont was founded in 1988 to create affordable housing through a new housing program created in 1986: the federal low-income housing tax credit (LIHTC) program.

Levy stayed in Vermont for seven years. “I started talking to my wife about buying a second inn, and [instead] she convinced me to sell the first one,” says Levy.

Levy returned to New York City in 1995 and joined a subsidiary of Local Initiatives Support Corp. As president of Local Initiatives Managed Assets Corp.

(LIMAC), he raised money for community development lending by creating a secondary market to sell community development loans to investors. “They didn’t have a full-time president,” says Levy. “They needed a Wall Street guy to come in and create some new financing structures.”

Having returned to the city, Levy never missed the muffins he’d left behind back in Vermont. “I loved being an investment banker. I loved being an innkeeper,” he says. He also loved creating an entirely new kind of company to finance affordable housing. “No one had ever done this before. Who knew how to do it? ... I love starting things.”

He also began a close relationship with Habitat for Humanity. In 1997, Levy created a unique financing program for Habitat that would allow it to raise additional funds to build more homes.

The first bond issue raised $2.5 million for Habitat. “It made the front page of The Wall Street Journal, above the fold,” says Levy. “I had done $300 million deals that didn’t get into the Journal.”

Levy eventually helped Habitat raise more than $146.6 million for 276 local Habitat affiliates throughout the United States. He also served as an adviser to Habitat on an international microlending program for small business.

Meanwhile, after four years, LIMAC had grown almost too large for LISC. In 1999, Levy spun off the business from LIMAC into the Community Development Trust (CDT), the first real estate investment trust in the country devoted solely to providing debt and equity capital for community development projects.

Over the next 10 years, the CDT raised $120 million in equity capital and provided more than $1 billion in financing for low-income housing tax credit projects across the country.

For many smaller LIHTC projects, the CDT has been the only available source of long-term fixed-rate mortgages, says Levy.


Change comes to the NYHFA

Levy also helped transform one of the biggest tax-exempt bond programs in the country as chairman of the board of directors for the New York Housing Finance Agency (NYHFA) and the state of New York Mortgage Agency, from 2007 to 2011. “We increased the emphasis on 100 percent affordable housing,” says Levy.

In prior years, the NYHFA had focused on mixed-income towers in the heart of Manhattan. These mostly luxury, “80/20” buildings lease 80 percent of their apartments at unrestricted, market rents. The other 20 percent are reserved for low-income families.

“We completely changed the focus of the agency away from the 80/20 business,” says Levy. In 2006 and the years before, more than a third of the apartments financed by the NYHFA were 80/20 projects, which allowed the agency to finance more 100 percent affordable housing. The NYHFA financed more than 4,000 affordable units in 2007, three times the total in 2006.

A change at the New York governor’s office underscored the change at the NYHFA. Just in leaving at the end of 2006, the outgoing George Pataki administration rushed through commitments to provide $3.5 billion in tax-exempt bond financing to a handful of 80/20 deals planned for midtown Manhattan, forward-committing bond cap from future years.

“We canceled all those deals,” says Levy. The developers had to resubmit their applications and compete for funding.

“You can imagine the screaming that occurred,” he remembers. “I was at a meeting with the developers. One of them actually said: ‘Wait a minute! You can’t make this into a competition!’” In his spare time, Levy enjoys playing in poker tournaments, although the stakes are modest, with each player typically bringing $80 to $100 to the table.

He’s also still involved with affordable housing. Levy serves on the board of directors for Enterprise Community Investment and was involved in Enterprise’s effort to combat the foreclosure crisis.