"There is no question that securing financing has become much more challenging in the current economy," Moritz says. "Credit has gotten much more expensive, tax credit pricing has gone down substantially and only the strongest affordable housing developers have the experience in this market to put together all the financial pieces required to close an affordable housing deal."

The New York City Housing Development Corp. is providing $11 million in tax-exempt bonds through its Low-Income Affordable Marketplace Program, or LAMP, and about $4.6 million in subordinate financing to Westchester 2 GP LLC, a limited-liability company owned by the Floral Park, NY-based Arker Cos.' principals. The 73,500-square-foot development--to be located at 886 Westchester Ave. in the Longwood section of the Bronx--is also receiving $7.4 million in tax credit equity from Wachovia Securities. Freddie Mac, through MMA Financial, is providing credit enhancement for a $4.1-million permanent mortgage. Bank of America is participating with a construction letter of credit in the amount of $11.1 million, and is also providing a $2.16-million loan to finance the project's 11,820-square-foot retail portion.

The residential units will be reserved for households earning up to 60% of the annual median income for New York City, according to a release. Seventeen units will be set aside for formerly homeless families and individuals. Construction is expected to start later this month and be completed in the fall of 2010.