Division of Housing Helps Developers Facing Financing Gap

ALBANY, NY (06/16/2008)(readMedia)-- The state Division of Housing and Community Renewal (DHCR) has approved three grants that will save affordable housing developments that had been jeopardized by the turmoil in the credit and mortgage markets.

The grants will help fill financing gaps caused by the devaluation of state and federal tax credits, which DHCR awards to developers to encourage the construction of affordable housing. Developers sell the tax credits to investors to generate private investment to help finance affordable housing projects.

However, due to the economic downturn, developers who anticipated receiving approximately 92 cents to the dollar for the credits have found their value drop to 85 cents or less to the dollar.

DHCR was the first housing agency in the nation to take action on decreased tax credit equity. Commissioner Deborah VanAmerongen said "This is a national problem impacting almost all affordable housing developers. We decided we had an obligation to step in and help those developers who have exhausted all other options but still can't secure the funds to complete their project."

VanAmerongen said her agency will attempt to help those developers who have sought additional sources of funding and who have implemented cost-cutting measures, including cutting or deferring their own development fees.

The first three grants of this kind were approved today by the Housing Trust Fund Corporation (HTFC) which is administered and staffed by DHCR and chaired by DHCR Commissioner VanAmerongen.

The three projects are located in the Cities of Syracuse and Binghamton and in the Town of Fishkill in Dutchess County.

New Westside Townhouses in Syracuse will provide 14 units for low-income families and people with physical disabilities. The developer had received $568,000 in tax credits in November 2007, only to find that their equity investor could not sustain its previous offer. The developer, Christopher Community, Inc., was approved for an additional $148,000 in funding.

In the City of Binghamton, the decreased value of tax credits endangered the historic Dwightsville Gateway Apartments project, which would rehabilitate four two-story buildings and a three-story building containing 13 units of rental housing and two commercial units in a gateway neighborhood. The not-for-profit developer, First Ward Action Council, Inc, which received $610,000 from the HTFC last year, was approved to receive an additional $254,710 in funding.

Views at Rocky Glen in Fishkill will provide 82 rental units for low and very low-income families. The developers, Orange County Rural Development Advisory Corp. and Regan Development Corporation, had received a Housing Trust Fund award of $2.2 million last year, but found the reduction in credit equity created a financing gap. The HTFC today approved an additional $364,000 in funding to help close that gap.

Additional information on DHCR's Low-Income Housing Credit Equity Gap program can be found at: http://www.nysdhcr.gov/ocd/pubs/LIHC_Add_Fund.htm

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