By Orlando Lee Rodriguez
The Community Preservation Corporation has secured $250 million in financing from Citigroup, the New York based financial services company for low and moderate income housing.
One Citigroup’s largest one-time affordable housing investments, the cash infusion will create 6,000 units of affordable housing.
Half of the units and $100 million of the financing will be specifically designated for projects within the five boroughs of New York City.
An undisclosed percentage of the Citigroup funding will also be set aside for the Storm Recovery Loan Fund, a pilot program providing rehabilitation loans to home owners affected by Hurricane Sandy.
“This initiative will provide much needed capital for affordable housing in communities across New York City and State,” said Rafael E. Cestero, president and CEO, The Community Preservation Corporation. [It] reflects CPC’s renewed focus on our core mission of creating sound rental housing for lower income families and rebuilding communities.”
Shares of Citigroup hit their highest levels for the year on Friday and have risen by almost five percent in the past month. Overall share prices are up almost 27 percent since Citi chairman Michael O’Neil forced the resignation of then CEO Vikram Pandit in mid-October.
“We are proud of our affordable housing financing achievements and Citi is extremely pleased to support CPC on this very important initiative,” said Andrew Ditton, co-head of Citi Community Capital.
“This milestone underscores our commitment to responsible finance, and we will continue to play an active role in preserving and revitalizing the communities we serve.”
In addition to the funding from Citigroup, The New York City Department of Preservation and Development (HPD) will provide construction financing with the New York City Housing Development Corporation (HDC) giving a 10 percent credit enhancement.
“We have prompted the investment of more than $21 billion for the preservation and construction of 144,700 affordable homes to date, leveraging private and other investment at a rate of more than $3 for every dollar we’ve put to work,” said HPD Commissioner Mathew M. Wambua.
“By bringing additional resources to finance affordable housing throughout the City, our partners are helping to ensure that thousands hardworking New York families will have safe, decent, affordable homes.”
The first properties slated for renovation under the financing will be two occupied 10 unit buildings at 539-541 East 147th Street in the Mott Haven section of The Bronx. The properties, currently owned by Wokforce Housing Advisors (WFHA) are currently overleveraged. $1.59 million of the capital will come from Citi and CPC and $2.4 million in financing from HPD.