Neighborhood Pillars

Neighborhood Pillars Program Overview

HPD's Neighborhood Pillars program provides low-interest loans and tax exemptions to nonprofits, mission driven for profits and certified Minority and Women-owned Business Enterprise (M/WBE) to acquire and rehabilitate unregulated or rent stabilized residential buildings with significant financial and/or physical distress, in order to improve and preserve housing affordable to low- to moderate-income households.

Eligible Applicants and Buildings

The program is open to not-for-profit organizations, certified Minority and Women-owned Business Enterprise (M/WBE) and for-profit mission driven organizations. Eligible entities include 501(c)(3) corporations, single purpose housing development fund corporations using the HPD approved Certificate of Incorporation, limited partnerships, corporations, joint ventures where M/WBEs or not-for-profit organizations serve as the majority owners, limited liability companies, and individual owners. Qualified MWBE/MBE and non-profit borrowers may also utilize the Down Payment Assistance Fund, operated by Restored Homes Development, LLC, for financial and technical assistance in acquiring properties through Pillars.

Neighborhood Pillars is intended to acquire and reposition multiple dwellings with three or more units that are rent stabilized or unregulated, and meeting certain financial and physical property distress threshold criteria. Potential indicators of distress, include but are not limited to, a significant number of open HPD violations, substantial amounts of outstanding DOF and/or DEP arrears, considerable municipal debt relative to the property's market value and at-risk of loan default or foreclosure. Additionally, a property may be eligible for Neighborhood Pillars if they are involved in Special Enforcement Initiatives or HPD Enforcement Programs, undergoing comprehensive litigation with HPD, or issued vacate orders.

Properties that have current regulatory agreements with New York City, New York State, or the federal government restricting rents or household incomes are not eligible for the program.

Program Overview

HPD subsidy is combined with private financing. If acquisition will occur prior to construction and/or permanent financing, the Borrower should plan to finance the acquisition; the acquisition financing may be refinanced by a combination of private financing and HPD subsidy at rehabilitation loan closing. The maximum subsidy permitted is $380,000 per unit, depending on the other financing used, rehabilitation needs, and the rents charged to residents. Projects may be eligible for a full or partial property tax exemption. Borrowers must enter into a regulatory agreement for a minimum 30-year loan term and/or tax exemption and must commit to permanent affordability for no less than 30% of the units. Among other requirements, the regulatory agreement sets limits on allowable rents and initial household incomes and requires units to remain rent stabilized. All projects must set aside at least 20% of units for homeless households.

For more information on the loan terms, see the Neighborhood Pillars Term Sheet. Additional funding may be provided by the New York City Acquisition Fund.

How to Apply

All projects must submit a complete Preliminary Neighborhood Pillars Application with detailed information about the project characteristics and needs. After submitting a Preliminary Neighborhood Pillars application online, Borrowers must complete and submit the Underwriting Template to hpdplp@hpd.nyc.gov.

Non-profits and M/WBEs interested in using the Down Payment Assistant Fund in addition to the above should also contact Restored Homes Development LLC at 212-584-8981, ext.10 or info@neighborhoodrestore.org to begin the evaluation and review process.

Borrowers must request feedback from HPD on a project prior to making an offer to a seller. Borrower must request a soft commitment letter prior to acquisition, which will only be granted at HPD's discretion based on a review of the proposed project and the receipt of a short-form property needs assessment in a form and by a contractor acceptable to HPD and an "as-is" appraisal conforming to HPD's guidelines. A complete IPNA will be required for construction loan closing.

Neighborhood Pillars Down Payment Assistance Fund

The Neighborhood Pillars Down Payment Assistance Fund provides financial and technical assistance to not-for-profit housing organizations and minority and women-owned business enterprises (M/WBEs) with the acquisition of unregulated and/or rent stabilized multifamily properties in New York City for preservation through the New York City Department of Housing Preservation and Development (HPD) Neighborhood Pillars Program. The Neighborhood Pillars Down Payment Assistance Fund is administered by Restored Homes Development, LLC (Restored Homes), an affiliate of Neighborhood Restore HDFC.

Eligible Applicants

Qualified not-for-profit and certified M/WBE borrowers may be eligible to access the Neighborhood Pillars Down Payment Assistance Fund to use as a down payment/deposit on a contract to acquire properties as well as to cover limited pre-acquisition costs. To become an eligible borrower, visit the Preservation Buyer RFQ webpage.

The funds must be used for projects that will be financed through HPD's Neighborhood Pillars Program, except as otherwise approved by HPD. The funds may be used in conjunction with the New York City Acquisition Loan Fund, which is a recommended method for obtaining acquisition financing. For more information on eligible projects, please see the Neighborhood Pillars Down Payment Assistance Fund term sheet. For the New York City Acquisition Fund terms see the New York City Acquisition Fund.

Process

All borrowers must work with Restored Homes to apply for Neighborhood Pillars Down Payment Assistance Fund loans. Restored Homes will also assess building condition and capital needs and may additionally provide assistance in underwriting the project and moving towards an acquisition loan closing with the New York City Acquisition Loan Fund. The funds may be used for the contract down payment/deposit of up to 10% of the purchase price as well as limited pre-acquisition costs, including third party reports and some legal costs associated with closing on the acquisition.

The loan will accrue interest at 3% and is expected to be partially repaid through acquisition financing at the time of acquisition closing and fully repaid by the HPD loan closing. Additional terms and fees will apply, as outlined in the Neighborhood Pillars Down Payment Assistance Fund term sheet.

How to Apply

Non-profits and M/WBEs interested in using the fund may contact: Restored Homes Development, LLC at 212-584-8981, ext.10 or info@neighborhoodrestore.org for application information.