NYS Housing Finance Agency Approves $7 Million for Erie County Mitchell Lama

NEW YORK, NY (08/22/2007)(readMedia)-- The board of the New York State Housing Finance Agency (HFA) today approved a $7 million loan to finance major capital improvements at Creek Bend Apartments, a 130-unit Mitchell Lama project in the Village of Hamburg, Erie County.

In exchange for the financing, the project owner, Creek Bend Apartment LP, has agreed to keep rents affordable for an additional 40 years. Nearly all of the apartments in Creek Bend are set aside for families earning at or below $35,580, which is 60% of the Area Median Income for the Buffalo-Niagara Falls area.

Following today’s actions by the HFA board—which included approval of financing for the Creek Bend Apartments and three other preservation developments in the state—HFA has now approved financing to preserve 1,216 units of affordable housing in New York State since January 1, 2007.

“Creek Bend highlights HFA’s continued focus on the portfolio of the state’s Mitchell Lama projects and the Spitzer administration’s commitment to preserving affordable housing units across the State,” said Priscilla Almodovar, President and Chief Executive Officer of HFA. “We are proud our board approved today will protect the affordability of these apartments for the residents of Hamburg.”

The Creek Bend Apartments is a six-story, 130-unit Mitchell Lama project for seniors located at 25 Buffalo Street in the Village of Hamburg. The owner, Creek Bend Apartment LP, is controlled by Thomas Granville, managing director of Whitney Capital Company.

The HFA loan will finance a substantial rehabilitation of the project, though no tenant relocations will be necessary. The renovations include new windows, a new roof, updated common area floor coverings, improvement in common area lighting, new floor coverings for all residential apartments, upgraded kitchens and baths, including new cabinetry, countertops and appliances, and new lighting fixtures in the apartments.

The total cost of the project is nearly $12.7 million. In addition to the $7 million HFA mortgage, Creek Bend Apartments will continue to receive an annual $189,246 Section 236 Interest Reduction Payment (IRP) from the U.S. Department of Housing and Urban Development as part of the new refinancing; an annual allocation of $410,900 in Federal Low-Income Housing Tax Credits; and an HFA Subsidy Loan of $4.75 million.

The project is also expected to qualify for a local property tax abatement. Eligible tenants are expected to receive enhanced Section 236 vouchers to help pay the cost of their rent.

Creek Bend Apartments was built in 1974 using HUD’s Section 236 IRP financing. Under this program, affordable rental units were developed with low-interest mortgage loans and property tax exemptions in exchange for limits on developer profit and tenant income limits.

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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.

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