The Community Preservation Corporation, a non-profit affordable housing and community revitalization finance company, and Goldman Sachs have created $70 million loan facility to finance affordable homeownership for moderate- and middle-income households in New York City.
The facility will finance construction loans for developers that receive subsidies from the New York City Department of Housing Preservation and Development (HPD) for the construction and rehabilitation of up to 350 affordable homeownership units over the next 18 months throughout New York City.
The majority of the homes are located in the Bronx and Brooklyn — which have the second and fourth lowest rates for homeownership of any county in the United States, respectively — and includes a mix of one- to three-family homes and small apartment buildings.
As the demand for affordable housing and homeownership in New York City continues to grow, the facility, which is financed with 30 percent of its capital from CPC and the remaining 70 percent from Goldman Sachs, is an example of a flexible lending solution aimed at serving the unique affordable housing and revitalization needs of underserved communities.
“While New York relies heavily on its rental housing stock, it’s critical that we also focus on building opportunities for affordable homeownership in the City,” said Rafael E. Cestero, president and CEO of CPC.
“Affordable homeownership has often helped to lay the foundation for stability and subsequent revitalization in underserved communities in the South Bronx, Harlem, Brooklyn, and elsewhere throughout New York. I thank our partners at Goldman Sachs for their investment and for their confidence in CPC’s ability to bring private capital to projects that will make an impact in our city’s communities and the lives of the future homeowners.”
“The ability to own a home can be a game changer, especially for moderate- and middle-income families,” said Margaret Anadu, Goldman Sachs managing director who leads the Urban Investment Group.
“Creating that opportunity is a crucially important part of the revitalization of underserved communities. As such, affordable for-sale housing has always been a priority of our work, and we’re incredibly proud to continue working with CPC to help more households in New York City attain what is a cornerstone to achieving economic prosperity.”
While New York is and has historically been a city of renters, studies have shown that homeownership can help provide stability to underserved and growing neighborhoods as the homeowners build equity in their homes and put down permanent roots in the community.
Projects eligible for loans through the CPC and Goldman Sachs affordable homeownership facility must receive subsidy through one of HPD’s affordable homeownership programs, including the New Infill Homeownership Opportunity Program (NIHOP).
NIHOP’s preference is given to projects with one-third of the units affordable to households earning up to 80-90 percent of area median income. Once completed, the homes are sold to families who agree to occupy the home for 20 years.