The developer, Diego Beekman Mutual Housing Association (Housing Development Fund Corp.), is a not-for-profit entity formed in 2003 for the acquisition of the Diego Beekman complex from HUD. In compliance with HUD mandates, 75% of the residential units have been earmarked for households with income under $50,240. Current low-income families will receive rent subsidy for five years through the Section 8 program. Since 1998, Fleet has provided some $200 million in financing in the Bronxresulting in over 2,500 units of affordable housing.
"Our hope is that it will serve as the catalyst to ongoing improvement in the entire area," says Philip Grossman, EVP and market manager, Community Real Estate Finance at Fleet.
Another Fleet project is the Fountains at Spring Creek. The East New York development at 922 and 1101 Forbell Street consists of two newly constructed three-story buildings containing a total of 102 affordable apartments. A partnership between the public and private sectors enabled the development, which cost $15.5 million to construct, to be financed as an affordable housing for low-income residents. Monthly rents range from $586 to $753 for the studio, one- and two-bedroom apartments.
HDC provided a $7.8 million construction loan through its Low-Income Affordable Housing Marketplace Program. Through this program tax-exempt bonds are issued to make a low-cost loan and qualify a development to receive Federal Low-Income Housing Tax Credits. WNC and Associates acted as the tax credit investor and Fleet Bank provided the Letter of Credit necessary to secure the bond financing.
"These kinds of creative partnerships are providing decent housing for low-income families while continuing to restore neighborhoods and communities across the city," adds Grossman. Since 1998, Fleet has provided nearly $50 million in financing for the creation of affordable housing in East New York resulting in over 703 residential units.
In addition to the low cost financing the Arker Companies received funding through the sale of HPD's 421-a negotiable certificates. Developers of low-income housing receive these certificates from HPD and, in turn, sell them to developers of market-rate housing in mid-Manhattan. The proceeds from the sale of these certificates enable the low-income developers to pay off the debt on their projects. With no permanent debt left on the property, the developers are able to charge less for rents, making the apartments more affordable. This development will provide 421-a partial tax exemption benefits for 520 eligible units in the Manhattan geographic exclusion area.
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