Nonprofit Extends Fund for Housing

Wall Street Journal
August 28, 2016
By Emily Nonko

The Community Preservation Corporation, a nonprofit that finances affordable housing in New York, has extended a fund to support such housing development in the city and state.

Some $490 million of capital was provided by Citi Community Capital, the lead lender, and 14 other private and public partners, according to Rafael E. Cestero, president of CPC. “It’s a unique mix of public and private institutions that show a common interest in investing in affordable housing,” Mr. Cestero said. The New York City Pension Funds invested $40 million, while Wells Fargo & Co. has invested $75 million.

The funding will be allocated as construction loans for developers acquiring, building, rehabilitating or preserving affordable multifamily housing.

The average loan size offered by CPC is $6 million, according to Mr. Cestero. “We’re able to finance smaller projects that larger commercial banks cannot,” he said. That makes the lending facility particularly appealing to investors, he said.

CPC formed this lending facility with the same firms it had joined with in 2014. That $350 million fund went on to finance 63 housing projects, 27 of which are located in New York City.

For this latest round of funding, Citi Community Capital increased its investment from $75 million to $95 million, according to Richard Gerwitz, co-head of Citi Community Capital.

“CPC has been incredibly efficient at a time when there’s a real need for all types of affordable housing in New York City and New York state,” Mr. Gerwitz said.