A non-profit owner and its development consultant have secured financing to keep a Harlem Mitchell Lama building affordable for the next 30 years.
HOPE Community, with assistance from Carthage Real Estate Advisors, recently closed on the recapitalization of Canaan House, a 147-unit Mitchell Lama property.
The $40 million transaction could not have happened without assistance from the New York State Housing Finance Agency, The U.S. Department of Housing and Urban Development, Raymond James Financial, and Citibank. Carthage utilized the HUD RAD (Rental Assistance Demonstration) program along with tax exempt bonds and low income housing tax credits to pay for the various costs associated with the project.
Edward Poteat, president of Carthage Advisors, said, “RAD is the best tool HUD has to maintain affordability in its existing multifamily portfolio. Carthage has used RAD on four transactions since the inception of the program in 2013.
“Given our double bottom line approach of developing profitable projects which are also profitable for the surrounding community, RAD has been a perfect financial product for our recent transactions.ˮ
Walter Roberts, Executive Director of HOPE Community, is “proud of the lasting impact this transaction will have on the surrounding community. Several Mitchel Lama buildings nearby Canaan House have lost their affordability. Tenants have been displaced, rents have risen dramatically, and the surrounding community has been disrupted. Housing in Manhattan should not just be for the wealthy.
“Although some development of Harlem is welcomed, Hope has found a way for long-term local residents, who made Harlem attractive, to avoid being displaced to make way for the current wave of development. The 146 households at Canaan House will have their affordability maintained for another 30 years. Hope will continue our work to create and preserve more affordable housing.
Besides maintaining its affordability in the building, Canaan House will undergo a $10 million renovation which will address deferred maintenance at the building.
The renovations will include several energy conservation items such as a more energy efficient heating system. All qualified tenants will receive Section 8.