Funding Will Transform Unsold Condominiums, Unrented Apartments and Stalled Construction Sites into Affordable Housing for Working Families 

Department of Housing Preservation and Development (HPD) Commissioner Rafael E. Cestero announced today that the City is releasing the Notice of Funding Availability (NOFA) for the financing of affordable housing under the City’s new Housing Asset Renewal Program (HARP). The $20 million pilot program will turn unsold condominiums, unrented apartments and stalled construction sites into affordable housing opportunities for moderate- and middle-income families. The affordable housing created will be part of Mayor Michael R. Bloomberg’s New Housing Marketplace Plan to build and preserve 165,000 units of affordable housing, and part of the City’s Five Borough Economic Opportunity Plan to create jobs for New Yorkers, implement a vision for long-term economic growth and build affordable, attractive neighborhoods. 

The Housing Asset Renewal Program, originally proposed by City Council Speaker Christine Quinn in her State of the City speech and announced earlier this month by Mayor Bloomberg and Speaker Quinn, will create as many as 400 units of affordable housing. The program will focus on two types of problematic developments: completed projects that are vacant and incomplete buildings that have stalled mid-construction.

“This program gives us an opportunity to stabilize neighborhoods that have been most affected by the economic downturn while giving us fresh opportunities to create affordable housing,” said Commissioner Cestero. “We at HPD appreciate the leadership shown by Mayor Bloomberg, Speaker Quinn, Housing Chair Dilan and Land Use Chair Katz and look forward to strengthening this productive relationship for the benefit of our City.”

In order to be eligible for funding consideration, a proposed project must be a completed or partially constructed, unoccupied, residential building in the City of New York where, due to market or construction conditions, the owner is unable to complete construction or to sell or rent a sufficient number of units to meet private lending requirements.  The funding available through HARP is intended to convert market-rate units to affordable units and enable the owner to complete construction and/or rent or sell the units.  Applicants must agree to restrict rents or sales prices for a minimum of 50 percent of the dwelling units in return for HARP subsidy and/or permanent financing.

For projects that propose affordable homeownership, a preference will be given to projects that require a HARP subsidy of less than $50,000 per affordable dwelling unit. In addition, the proposal must reflect sales prices for homeownership units that are affordable to households with incomes at or below 165 percent of the Department of Housing and Urban Development’s Income Limits (HUD IL) – $126,700 for a family of four or $88,700 for an individual – and must include a letter of interest from an end-loan provider.

For projects that propose affordable rental housing, a preference will be given to proposals that require a HARP subsidy of less than $75,000 per affordable dwelling unit. In addition, the proposal must reflect rents that are affordable to households with incomes at or below 130 percent of HUD IL – $99,800 for a family of four or $69,900 for an individual. Permanent first mortgage financing may be from either private institutional lenders or the NYC Housing Development Corporation (HDC).

Projects in neighborhoods that have been particularly hard hit by the downturn in the housing market may qualify for subsidy from the federal Neighborhood Stabilization Program (NSP). Higher levels of subsidy may be made available for these projects.  The project may be owned by the original owner of the project, a new owner or a lender foreclosing upon the project. New construction projects that have received prior government subsidies are not eligible.

Applications for the NOFA will be accepted from mid-August through December of 2009. Proposals will be reviewed by HPD and HDC. Funding will be awarded on a rolling basis starting in September. Preference will be given to projects in neighborhoods that will benefit most from intervention as determined by neighborhood distress indicators such as vacancy rates and property value trends.  Preference may be given to projects in neighborhoods with previous public investment and in NSP eligible census tracts. Preference will also be given to proposals where applicants can demonstrate that the expected return on equity has been eliminated or substantially reduced from the project’s original underwriting and where a bank holding an existing mortgage on the building has agreed to a payoff at a discount, where the deepest level of affordability is achieved in relation to unsubsidized housing in the surrounding areas, where the most efficient use of government subsidy is realized and where the applicant commits to a longer period of affordability than the required 30 years.

Electronic versions of the NOFA are available on HPD’s website.

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The NYC Department of Housing Preservation and Development (HPD)

HPD’s mission is to promote quality housing and viable neighborhoods for New Yorkers. It is the nation's largest municipal housing preservation and development agency. Responsible for implementing Mayor Bloomberg's New Housing Marketplace Plan to build and preserve 165,000 units of affordable housing, HPD also actively promotes the preservation of affordable housing through education, outreach, loan programs and enforcement of housing quality standards. For more information visit www.nyc.gov/hpd.

New York City’s Five Borough Economic Opportunity Plan

The Five Borough Economic Opportunity Plan is a comprehensive strategy to bring New York City through the current economic downturn as fast as possible. It focuses on three major areas: creating jobs for New Yorkers today, implementing a long-term vision for growing the city's economy, and building affordable, attractive neighborhoods in every borough. Taken together, the initiatives that the City has launched to achieve these goals will generate thousands of jobs and put New York City on a path to economic recovery and growth.