The Article 8A Loan Program provides rehabilitation loans to correct substandard or unsanitary conditions and to prolong the useful life of multiple dwellings in New York City. Rehabilitation is generally limited to the upgrading or replacement of major building systems with an emphasis on energy items. In general, loans cannot exceed the actual cost of rehabilitation. Loans are available in amounts of up to $35,000 per dwelling unit with no maximum per building, subject to the availability of funds. Loans may not be used to refinance existing debt on the property.
To qualify for a loan the borrower must own the property or have a contract to purchase. Individuals, partnerships and corporations are eligible. Preference will be given to buildings that have been maintained in accordance with City's Housing Maintenance Code or where the applicant furnishes assurance that all work required to comply with the code will be completed. Building condition and finances must demonstrate a need for funds, and owners must be unable to obtain financing privately. The interest rate is 3% with repayment in equal monthly installments and there is a prepayment surcharge within the first five years of the loan. The term of the loan may not exceed 30 years or the useful life of the improvements, whichever is less. There is a non-refundable application fee of $150.00 and a commitment fee equal to one (1%) of the loan amount payable at closing, plus a 1/2% legal fee. Non-profits are exempted from fees.
Loans are restricted to buildings occupied by tenants of low income. After rehabilitation, real property taxes may be eligible for abatement, and there will be no change in the rent regulation status (controlled, stabilized) of the units in the building. Where appropriate, rents may be adjusted to ensure repayment of debt service.
To download the Article 8A Term Sheet, click here. To obtain a copy of the Article 8A Application materials, please call (212) 863-8229 or (212) 863-6978.
Click here to learn about other building rehabilitation loans.