Owners to Receive Low Cost Financing to Upgrade Facilities; Agree to Keep Rents Affordable
NEW YORK, N.Y., September 26, 2007 — The New York State Housing Finance Agency (HFA) today announced that it will offer flexible, low-cost financing to owners of state-financed Mitchell Lama developments. Under HFA’s new “Mitchell Lama Rehabilitation and Preservation (RAP)” program, owners will be able to refinance existing mortgages in return for keeping rents affordable and rehabilitating their property.
HFA also plans to offer up to $15 million of zero-interest repair loans to state-financed Mitchell Lama projects most in need of immediate repairs. Some of these projects will also be potential participants of the new RAP program. The loans will be funded from HFA’s available resources.
The HFA board has already approved two Mitchell Lama RAP refinancings— a $6.7 million loan for the 119-unit Admiral William F. Halsey Senior Village Apartments in Poughkeepsie and a $7 million loan for the 130-unit Creek Bend Apartments in Hamburg, Erie County.
To date HFA has approved financing to preserve 1,679 units of affordable housing in New York State since January 1, 2007, and is on target to reach its goal of preserving 3,000 units by the end of the year.
“Preserving affordable housing in New York State is a key objective of my administration and that is why the Mitchell Lama preservation program is so important,” Governor Spitzer said. “This plan will improve the quality of life for tens of thousands of New York renters and give them peace of mind that their apartments will remain affordable for generations to come.”
Priscilla Almodovar, President and Chief Executive Officer of HFA, said, “The Mitchell Lama RAP Program will free up resources for owners to make needed capital improvements and upgrades to aging buildings. At the same time, residents’ homes will remain affordable and be improved.
“Today’s announcement is part of our continuing effort to create greater transparency in our programs, to maximize the State’s precious housing resources and to use HFA’s available funds to advance the State’s affordable housing objectives,” Ms. Almodovar said.
Under the RAP program, HFA will offer flexible, low-cost financing to help lower debt service payments for Mitchell Lama owners, which will free up resources for capital improvements and building repairs. In exchange, owners will be required to keep rents affordable for an additional 40 years.
HFA will finance loans under the RAP program from a number of sources. These include tax-exempt private activity bonds; federal Low-Income Housing Tax Credits; tax-exempt 501(c)(3) bonds for eligible nonprofit organizations; taxable bonds; and HFA’s available resources.
The Mitchell Lama program, created by state legislation in 1955, offered property tax exemptions and low-interest mortgages to developers in return for below-market rents and limits on profits. Most Mitchell Lama owners are able to opt out of the program after 20 years and rent their apartments at market rates. Today, 184 state-financed projects remain in the program with about 73,000 units. These projects are located in 30 counties and 60 cities throughout the State.
Many of the Mitchell Lama projects built in the early years of the program are in need of major repairs. Among the capital improvements and building repairs owners may undertake under the RAP program are: fixing and replacing obsolete major systems in need of immediate repair; upgrading facilities to meet applicable new federal, state or local housing or building codes; and improving their buildings’ energy efficiency.
New York Energy $mart program incentives from the New York State Energy Research and Development Authority (NYSERDA) will be available to Mitchell Lama owners participating in the RAP program in order to make the projects more energy efficient. Through NYSERDA’s Multifamily Performance Program, buildings must reach a performance target for energy efficiency to receive financial incentives.
“Energy efficiency is important for affordable housing,” said NYSERDA President and CEO Paul Tonko. “NYSERDA’s Multifamily Performance Program not only lowers energy costs, but improves the comfort and indoor air quality of the building. This project with New York State Housing Finance Agency demonstrates a coordinated effort to pool our resources to improve affordable housing and the quality of life for its residents.”
A term sheet with detailed terms for the RAP program is available at www.nyhomes.org.
The NYS Housing Finance Agency was created in 1960 to sell bonds to finance the construction and rehabilitation of multi-family affordable rental housing in New York State.
Contact: Philip Lentz
Director of Communications
212-688-4000 ext. 679
Plentz (at) nyhomes (dot) org
