City’s new Acquisition Loan Fund officially open for business
The New York City Acquisition Loan Fund officially opened for business on August 10, thanks to a committed partnership between Enterprise, Local Initiatives Support Corporation, other intermediary organizations, the City of New York, and several major foundations and financial institutions.
Acquisition and predevelopment loans are now available through the Fund for the creation and preservation of affordable housing in New York City. With its flexible underwriting terms and shorter turnaround time than any previously available source of financing, the Fund is a major new resource for both nonprofit and for-profit developers.
“It’s unprecedented in both is structure and in its scale,” said Shaun Donovan, Commissioner of the New York City Department of Housing Preservation and Development.
Deals happen quickly in today’s competitive real estate market. The New York City Acquisition Loan Fund gives affordable housing developers access to the capital they need in a short timeframe. The $200 million Fund provides bridge loans for projects awaiting financing from public agencies, giving developers more capacity to participate in the housing business and keep their neighborhoods affordable.
The Fund offers loans with Loan to Value of up to 130% for nonprofits and 95% for for-profits. Eligible projects include developments for low-income residents, developments in deteriorating communities, special needs housing and the preservation of at-risk affordable housing. Both rental and homeownership projects are eligible for loans from the Fund. In addition, the Fund provides loans for property acquisition and predevelopment costs including but not limited to appraisals, environmental assessments, title and zoning, consultants and other activities required to secure City or State subsidies.
“The New York City Acquisition Loan Fund is the purest example New York has seen in a long time of the desire to improve the material, social and spiritual welfare of humanity through charitable activities–the very definition of philanthropy,” said Mayor Michael Bloomberg. As the first of its kind in the country, the Fund will serve as a model for the creation of other similar funds.
Partners who made the Fund possible are: Bank of America, Bank of Tokyo-Mitsubishi UFJ Trust Company, Battery Park City Trust Fund Loan, Bernard E and Alva B. Gimbel Foundation, Citibank N.A., City of New York and Mayor Michael Bloomberg, Commerce Bank, Corporation for Supportive Housing, Deutsche Bank, Fannie Mae, F.B. Heron Foundation, Ford Foundation, Forsyth Street Advisors, HSBC Bank, Local Initiatives Support Corporation, Low Income Investment Fund, John D. & Catherine T. MacArthur Foundation, JPMorgan Chase N.A., Manufacturers and Traders Trust, Merrill Lynch Community Development Company LLC, Mizuho Corporate Bank, National Equity Fund, New York City Department of Housing and Preservation, New York City Housing Development Corporation, New York Community Trust, North Fork Bank, Open Society Institute, Robin Hood Foundation, Rockefeller Foundation, Starr Foundation, Signature Bank, United States Trust Company, Wachovia, Washington Mutual.Source: Real Estate Weekly