Loan Facility Helps Developers Construct or Rehabilitate up to 350 Affordable Homes for Moderate- and Middle-Income New Yorkers
New York, NY, October 27, 2016 – The Community Preservation Corporation, a leading nonprofit affordable housing and community revitalization finance company, and Goldman Sachs today announced the creation of a $70 million loan facility to finance affordable homeownership for moderate- and middle-income households in New York City.
The facility will finance construction loans for developers that receive subsidies from the New York City Department of Housing Preservation and Development (HPD) for the construction and rehabilitation of up to 350 affordable homeownership units over the next 18 months throughout New York City. The majority of the homes are located in the Bronx and Brooklyn—which have the second and fourth lowest rates for homeownership of any county in the United States, respectively—and includes a mix of one- to three-family homes and small apartment buildings. As the demand for affordable housing and homeownership in New York City continues to grow, the facility, which is financed with 30% of its capital from CPC and the remaining 70% from Goldman Sachs, is a great example of a flexible lending solution aimed at serving the unique affordable housing and revitalization needs of underserved communities.
“While New York relies heavily on its rental housing stock, it’s critical that we also focus on building opportunities for affordable homeownership in the City,” said Rafael E. Cestero, president and CEO of CPC. “Affordable homeownership has often helped to lay the foundation for stability and subsequent revitalization in underserved communities in the South Bronx, Harlem, Brooklyn, and elsewhere throughout New York. I thank our partners at Goldman Sachs for their investment and for their confidence in CPC’s ability to bring private capital to projects that will make an impact in our city’s communities and the lives of the future homeowners.”
“The ability to own a home can be a game changer, especially for moderate- and middle-income families,” said Margaret Anadu, Goldman Sachs managing director who leads the Urban Investment Group. “Creating that opportunity is a crucially important part of the revitalization of underserved communities. As such, affordable for-sale housing has always been a priority of our work, and we’re incredibly proud to continue working with CPC to help more households in New York City attain what is a cornerstone to achieving economic prosperity.”
“Housing New York commits to finance the creation and preservation of affordable rental and homeownership opportunities for 200,000 hardworking New York households,” said HPD Commissioner Vicki Been. “We are proud to have partners in the private and nonprofit sector who understand the importance of leveraging their resources to help us accomplish a shared mission of strengthening and stabilizing New York City’s neighborhoods through affordable homeownership. My thanks to CPC and Goldman Sachs for their continued partnership and dedication to creating a more equitable and affordable city.”
While New York is and has historically been a city of renters, studies have shown that homeownership can help provide stability to underserved and growing neighborhoods as the homeowners build equity in their homes and put down permanent roots in the community. According to NYU Furman Center/Citi Report on Homeownership & Opportunity in New York City, New York City is well below the national average with only 25% of moderate-income households owning their homes as compared to 58% nationwide.
Projects eligible for loans through the CPC and Goldman Sachs affordable homeownership facility must receive subsidy through one of HPD’s affordable homeownership programs, including the New Infill Homeownership Opportunity Program (NIHOP). NIHOP subsidy promotes the construction of new homes affordable to New York City’s workforce community. NIHOP’s preference is given to projects with one-third of the units affordable to households earning up to 80-90% of area median income. Once completed, the homes are sold to families who agree to occupy the home for 20 years.
About the Community Preservation Corporation (CPC)
Established in 1974, CPC is a nonprofit affordable housing and community revitalization finance company that believes housing is central to transforming underserved neighborhoods into thriving and vibrant communities. We provide innovative capital solutions, fresh thinking and a collaborative approach to the often complex challenges that owners and developers of multifamily housing face. To date, CPC has leveraged approximately $9.7 billion in private and public investment to finance more than 170,660 units of affordable housing. Our work with our partners has helped revitalize countless neighborhoods throughout New York, and provided quality housing for families, senior citizens, and individuals with disabilities. Follow us at communityp.com, and on Facebook, Twitter and LinkedIn.
About the Goldman Sachs Urban Investment Group
Established in 2001, the Goldman Sachs Urban Investment Group deploys the firm's capital by making investments and loans that benefit urban communities. Through its comprehensive community development platform, UIG is a catalyst in the revitalization of underserved neighborhoods. UIG has committed over $5.0 billion, facilitating the creation and preservation of over 20,700 housing units - the majority of which are affordable to low, moderate and middle-income families - as well as over 2,000,000 square feet of community facility space and over 6,100,000 square feet of commercial, retail, and industrial space.