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NYC Department of Housing Preservation & Development
Developers

´╗┐Distressed Asset Financing Programs
The Distressed Asset Financing Programs address issues of financial and physical distress in both small homeownership projects and large multifamily properties. This group is responsible for providing both financing tools and policy proposals that shape the City’s response to foreclosures, overleveraged properties, declining sales markets, and stalled sites. These programs include:

NYC’s Foreclosure Prevention Initiatives
Neighborhood Stabilization Initiatives

Housing Asset Renewal Program (HARP)

The Housing Asset Renewal Program (HARP) is a pilot program that will turn unsold condominiums, market-rate rental buildings, and stalled construction sites into affordable housing opportunities for New Yorkers. This program was announced by Mayor Bloomberg and Speaker Christine Quinn in July 2009, with an initial commitment of $20,000,000. The program aims to convert market rate units into affordable housing opportunities for homeowners and renters earning at or below 165% AMI.

HPD invites development teams to submit applications for HARP funds. To learn more about program requirements and download application documents, please click here.

Read the Mayor’s Press Release

Overleveraged Properties Initiative (OPI)

The Overleveraged Properties Initiative is a method by which HPD identifies and monitors properties showing signs of financial and/or physical distress. Properties identified by OPI are targeted for code enforcement to prevent a worsening of distress and are considered for a number of preservation programs and tools. OPI’s goal is to maintain safe and comfortable living situations for tenants as properties work through financial and physical distress.

The overleveraged building stock encompasses multifamily properties that have recently been refinanced or purchased at inflated values and carry a level of debt that is unsustainable and potentially leads to physical distress for the residents. The risks of overleveraged properties are twofold: (1) In order to pay high mortgage payments, owners may attempt to illegally raise rents and vacate apartments; or (2) owners may divert revenue intended for property maintenance, neglecting the physical needs of the buildings. 

HPD has created a system of indicators of financial and physical distress to identify multifamily buildings in distress and to monitor the buildings over time. The indicators are based on a combination of factors including: mortgage related lis pendens filings or foreclosure actions; high sales price to income ratios; buildings placed in the Alternative Enforcement Program; the number of B and C violations per unit; and active comprehensive litigation cases.

The City has committed $750 million of resources to address the issue of overleveraged properties. These funds are a combination of acquisition financing available through the NYC Acquisition Fund and the NYC HDC as well as HPD’ s preservation finance programs: the PLP program and 8A program. These financial tools are being targeted to assist responsible owners purchase notes and/or properties in addition to making needed repairs.

HPD will issue a Request for Qualifications to identify qualified entities with experience in owning, rehabilitating and managing distressed properties. The resulting list of Qualified Developers will be used to identify potential candidates that HPD will support in becoming the developers and long-term owners of properties identified by OPI.  Please refer to the Requests for Proposals, Qualifications, and Offers page of the HPD site in March 2010 for a release of the RFQ.

HPD is committed to working with individuals and organizations interested in rehabilitating and owning financially and physically distressed properties. HPD welcomes these individuals and organizations to reach out to HPD with project proposals that may benefit from the Overleveraged Properties Initiative.

For more information about the Overleveraged Properties Initiative, please click here.

For more information about the RFQ and to download an application once available, periodically visit the Requests for Proposals, Qualifications, and Offers page here.

For more information on OPI, please call (212) 863-6169.

 



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