Image Credit: NYC HPD
The City estimates the program will assist in the acquisition of approximately 35 vacant sites over the next five years. On March 8, 2019, the New York City Department of Housing Preservation and Development announced a new program to advance the process for affordable housing development by providing loans for upfront costs to nonprofit developers. The New York City Down Payment Assistance Fund (DPAF) seeks to speed up the development process for affordable housing by providing funds to nonprofit developers that compete for the acquisition of vacant sites to build supportive and affordable housing. The program will provide flexible down payment loans to pre-qualified applicants.
Currently, there are 19 nonprofits listed as qualified applicants and pre-qualified by HPD. The program requires repayment of the full down payment, along with interest accruals, at the time of closing on an acquisition loan, so the fund will recapitalize over time. About $4.75 million has been allocated for the program through the Mayor’s Supportive Housing Task Force. The City estimates that the program will support the acquisition of approximately 35 private sites during the Fund’s initial five-year operating period.
DPAF will provide flexible down payment loans, which are typically not offered in the market because of the high risk which lenders are not willing to take on. The DPAF will be overseen by Forsyth Street, an asset management firm, and owned jointly by Enterprise Community Partners and the Local Initiatives Support Corporation (LISC) who are also co-members and managers of the New York City Acquisition Fund (NYCAF). The NYCAF has previously lent over $415 million dollars to 73 affordable and supportive housing projects, generating new production or preservation of 12,360 units over its 12-year history.
HPD Commissioner Maria Torres-Springer stated “This administration is working on every front to address the homeless crisis, including speeding up the production of supportive housing, a proven model that pairs high-quality affordable housing with the essential services residents need to thrive. The New York City Down Payment Assistance Fund fills a critical gap in the development process by helping nonprofits acquire private sites for supportive and affordable housing.”
Department of Social Services Commissioner Steven Banks stated “Supportive housing is one of the key tools we’re using in our effort to address homelessness on every front, providing permanent opportunities specifically designed for New Yorkers who need a place to live and support to overcome additional challenges as they get back on their feet. This initiative will further empower our partners in this effort to more effectively and more quickly get these crucial projects off the ground, while we continue working aggressively to achieve the goals laid out in the NYC 15/15 plan.”
By: Samantha Albanese. (Samantha Albanese is a CityLaw intern, and a New York Law School student, Class of 2019).