NEW YORK – January 24, 2008 – The New York State Housing Finance Agency (HFA) today issued its revised 2008 allocation criteria for developers who wish to apply for private activity tax-exempt bond financing for so-called “80/20” multifamily rental developments in New York City.
“Once again this year, HFA is faced with huge demand for private activity bonds, or what is sometimes referred to as volume cap,” said Priscilla Almodovar, President and Chief Executive Officer of HFA. “We are committed to financing as many projects as we can and to balancing the competing demands on this very scarce public resource. With our commitment today, I believe we strike the right balance between how much volume cap will go towards 80/20s as compared to other affordable housing projects.”
To qualify for an allocation of volume cap for an 80/20 project, developers of multifamily rental projects must agree to set aside at least 20% of the units for low-income households with incomes at or below $35,450, or 25% of the units for households with incomes at or below $42,500.
HFA created the guidelines because demand for volume cap greatly exceeds the amount of volume cap available to New York State. Under Federal law, approximately $1.6 billion in volume cap is allocated to the State annually for all statewide economic development activity funded with private activity bonds, including housing.
HFA anticipates that it will allocate up to $1 billion in volume cap over the next three years for New York City multifamily rental projects. However, $311 million has already been committed to previously approved 80/20 projects, leaving $689 million available for new commitments.
While HFA is not imposing a strict limit on the amount of volume cap that can be allocated per housing unit, it views $1.7 million per low-income unit as an efficient use of its volume cap.
According to the 80/20 term sheet, key criteria HFA will use to determine volume cap eligibility include:
- Maintaining affordable rental units beyond the period required in HFA’s standard regulatory agreement, or if a project is located in an inclusionary zoning area that requires permanent affordability;
- Construction readiness and financing readiness;
- Compliance with New York City’s planning and development goals, including projects in recently rezoned areas, projects on “catalytic” sites that will spark further redevelopment or projects located on city-owned land;
- Inclusion of housing units for special needs populations;
- Participation in the New York State Energy Research and Development Authority’s Multifamily Performance Program, in which NYSERDA provides financial benefits for energy efficiency measures.
The 80/20 term sheet will be posted on HFA’s website (http://www.nyhomes.org/). Developers are requested to submit their 2008 applications by February 15.
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 x679
plentz (at) nyhomes (dot) org
