CITY LAUNCHES NEW DOWN PAYMENT ASSISTANCE FUND TO SPEED THE PRODUCTION OF SUPPORTIVE AND AFFORDABLE HOUSING ACROSS NYC
Dedicated fund will help nonprofit developers compete for the acquisition of vacant sites to build supportive and affordable housing.
HPD is releasing a pre-qualified list of nonprofits approved to apply for the fund to acquire sites.
NEW YORK, NY [March 8, 2019] – The New York City Department of Housing Preservation and Development (HPD) Commissioner Maria Torres-Springer and New York City Housing Development Corporation (HDC) President Eric Enderlin announced today the official launch of the New York City Down Payment Assistance Fund (DPAF) to speed the production of supportive and affordable housing. In partnership with The Robin Hood Foundation, Charles H. Revson Foundation, Oak Foundation, Supportive Housing Network of New York, Enterprise Community Partners, Local Initiatives Support Corporation, Low Income Investment Fund, the Corporation for Supportive Housing, and the New York City Acquisition Fund, this dedicated fund will enable strong and experienced nonprofits to move more rapidly into contract for vacant properties, eliminating a growing obstacle to development on private sites. The revolving fund will be targeted to nonprofits that have been pre-qualified by HPD; the list of 19 nonprofits is now available on HPD’s website. The $4.75 million fund grew out of a report of the Mayor’s Supportive Housing Task Force, which was convened in January 2016 to offer recommendations on implementing NYC15/15, the City’s commitment to develop 15,000 units of supportive housing over 15 years.
“This administration is working on every front to address the homeless crisis, including speeding up the production of supportive housing, a proven model that pairs high-quality affordable housing with the essential services residents need to thrive. The New York City Down Payment Assistance Fund fills a critical gap in the development process by helping nonprofits acquire private sites for supportive and affordable housing,” said HPD Commissioner Maria Torres-Springer. “I want to thank all our public and private partners for coming together to find this innovative solution to expand our ongoing efforts to serve the most vulnerable in our great city.”
“Local nonprofits are critical partners in our work to provide meaningful, long-term solutions for New Yorkers struggling with economic inequality and homelessness,” said HDC President Eric Enderlin. “HDC is proud to provide $2.25 million to the new Down Payment Assistance Fund to help nonprofits overcome the obstacles they face in acquiring private sites for affordable and supportive housing development. I want to thank Robin Hood and all the partners who have contributed to launching this exciting and important new initiative.”
“Supportive housing is one of the key tools we’re using in our effort to address homelessness on every front, providing permanent opportunities specifically designed for New Yorkers who need a place to live and support to overcome additional challenges as they get back on their feet,” said Department of Social Services Commissioner Steven Banks. “This initiative will further empower our partners in this effort to more effectively and more quickly get these crucial projects off the ground, while we continue working aggressively to achieve the goals laid out in the NYC 15/15 plan.”
Supportive housing has become one of the most effective interventions to end and prevent homelessness among New York City’s most vulnerable individuals and families. The city has a sophisticated and growing network of mission-based developers with strong track records of building and operating permanent supportive and affordable housing, yet land acquisition remains a significant barrier. Notwithstanding the City and State’s commitment to fund supportive and affordable housing, there is a gap in the marketplace between the permanent subsidies offered and developers’ ability to make down-payments on sites at the outset. This situation demands an upfront, flexible capital source to fund the down-payment on future housing sites.
The $4.75 million DPAF, which includes $2.25 million from HDC, will help to overcome this significant obstacle for nonprofit development, as part of a broader strategy to increase the production of supportive and affordable housing units over the next decade. Eligible projects will include projects developed through the Supportive Housing Loan Program (SHLP), the Senior Affordable Rental Apartments (SARA) program or the Extremely Low and Low Income Affordability (ELLA) program with at least 30% of units set aside as supportive. The City anticipates that DPAF will support the acquisition of approximately 35 private sites over the Fund’s initial 5-year operating period.
DPAF will provide flexible down payment loans without a collateral requirement to pre-qualified nonprofits, a product that is unavailable on the market because it represents a greater level of risk than traditional lenders are willing to support. The DPAF will expect repayment of the full down payment, along with interest accruals, at the time of closing on an acquisition loan, so the fund will recapitalize over time. The DPAF will be overseen by Forsyth Street, and owned jointly by Enterprise Community Partners and the Local Initiatives Support Corporation (LISC) who are also co-members and managers of the New York City Acquisition Fund (NYCAF), which has lent over $415 million dollars to 73 affordable and supportive housing projects, generating new production or preservation of 12,360 units over its 12-year history. NYCAF’s four originating lenders will underwrite and close DPAF’s loans.
“Robin Hood is proud to partner with these caring organizations and city agencies to make the Down Payment Assistance Fund a reality,” said Emary C. Aronson, Chief Program Officer at Robin Hood. “The Down Payment Assistance Fund is an important tool to level the playing field for nonprofit developers to create supportive and affordable housing for New Yorkers in need.”
“DPAF will enable NYC’s outstanding nonprofit housing organizations to fast track the development of desperately needed housing for the most vulnerable New Yorkers. The Revson Foundation is proud to have played a formative role in its creation,” said Julie Sandorf, President, The Charles H. Revson Foundation.
“More innovative capital solutions are needed to combat New York’s homelessness crisis, so that seasoned mission-driven nonprofit developers can support our city’s most vulnerable residents by accelerating the creation of safe, decent affordable housing with services. Through the creation of the DPAF, nonprofit developers are able to more effectively compete in the private market by moving quickly into contract on vacant properties,” said Judi Kende, vice president and New York market leader, Enterprise Community Partners. “Enterprise is honored to support this public/private collaboration, by helping to design and now co-manage the DPAF, and we congratulate HPD, HDC, and all of the partners involved in the launch of this new fund.”
“We are thrilled about the launch of the Down Payment Assistance Fund (DPAF) program,” said Sam Marks, Executive Director of LISC NYC. “The program represents an acknowledgment by the City and the local philanthropic community that nonprofit mission-driven developers play a critical role in growing the supply of permanent supportive and affordable housing for the most vulnerable New Yorkers. We applaud leadership of the Robin Hood Foundation, Charles H. Revson Foundation, Oak Foundation, and the City in structuring a tailored program that provides flexible down payment loans to mission-driven developers so they can purchase vacant properties with greater nimbleness and speed. We stand ready to work with our nonprofit partners and ensure that DPAF moves the City closer to accomplishing the supportive and affordable housing production goals in the NYC 15/15 and Housing New York plans.”
“The Supportive Housing Network of New York is proud of its leadership in imagining and launching the Down Payment Assistance Fund. The Fund will provide our New York City nonprofit members with the resources to better compete in the city’s real-estate market as they continue their vital work to address the city’s homelessness and affordable housing crisis. We thank our steadfast partners in the multi-year effort and look forward to the Fund’s growth in coming years,” said Laura D. Mascuch, Executive Director, Supportive Housing Network of New York.
“The Low Income Investment Fund (LIIF) is pleased to participate in this new initiative that will support the efforts of nonprofit organizations to acquire privately-owned sites and develop them as affordable and supportive rental housing. Newly constructed affordable housing is critically needed across New York City, and the Down Payment Assistance Fund is another tool that LIIF will use to ensure that mission-oriented nonprofit developers and social service providers can contribute to meeting the housing demand of the most vulnerable New Yorkers, said Ivan Levi, Senior Loan Officer, Low Income Investment Fund.
“The Down Payment Assistance Fund (DPAF) resulted from a crucial recommendation made by the Mayor’s Supportive Housing Task Force subcommittee on development, which CSH was honored to serve on and support,” said Kristin Miller, CSH Director of Metro, which includes New York City. “Based on our extensive experience in early-stage lending, CSH is pleased to be an originator for DPAF and will continue to advocate for an expanded Fund to ensure dollars reach smaller providers creating supportive housing. Last year, our CSH pre-development loans hit a record $33 million and helped small and mid-sized developers struggling in New York’s expensive real estate market deliver supportive housing to end homelessness and unnecessary institutionalization for people facing multiple barriers like extreme poverty, disability, mental illness and substance use.”
In November, HPD issued a Request for Qualifications (RFQ) to establish a list of qualified nonprofits approved to apply for down payment assistance from the DPAF. The nonprofits will ensure the long-term affordability of the units developed on the site and provide critical social services, a key strategy in addressing the homelessness crisis in New York City.
The supportive housing created will count towards NYC 15/15 and Housing New York, the Mayor’s plan to produce 300,000 affordable homes by 2026. The City has financed 4,770 supportive housing apartments since the start of the administration.