New York City Affordable Housing Acquisition Loan Fund

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New York City Affordable Housing Acquisition Loan
Fund

• Overview
• April 18, 2006
• Prepared by Forsyth Street Advisors

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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND
Changing Circumstances Demand a New Approach

• For over 20 years, vacant city-owned property has
  been the primary source of land and buildings for
  affordable housing development.
• As of 2005, a vast majority of New York Citys in
  rem housing stock of property has been returned
  to private ownership.
• Today, affordable housing developers confront
• a scarcity of development sites,
• high land costs,
• environmental compliance considerations,
• competition from private developers,
• significant financial barriers.
• The NYC Affordable Housing Acquisition Loan Fund
  represents a new approach to address these
  acquisition obstacles.

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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND
Decline in In Rem stock 1979 - 2004
Source HPD Production Credit System
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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUNDFlow
of Funds

Fund Manager
Credit Committee
HPD and HDCSoft commitments of future funding
Foundation PRIs 32 MM
New York Acquisition Fund, LLC Managing Member
Enterprise Community Investment Member
National Equity Fund
Fund Guarantee Pool
Originators (Experienced CDFIs and HDC)
Borrowers
City Funds 8 MM
Borrowers
Senior Debt
Borrowers
Senior Lender Revolving Credit Line
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NYC AFFORDABLE HOUSING ACQUISITION LOAN
FUNDOriginating Lenders and Servicers

• Loan underwriting delegated to experienced CDFIs
  (Originating Lenders).
• Originating Lenders will originate and service
  Project Loans.
• Originating Lenders include
• Corporation for Supportive Housing
• Enterprise Community Loan Fund
• Local Initiatives Support Corporation
• Low Income Investment Fund
• New York City Housing Development Corporation

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NYC AFFORDABLE HOUSING ACQUISITION LOAN
FUNDCredit Committee

• A six person Credit Committee will be responsible
  for the
• Approval of Originating Lender Criteria and
  approval of prospective Originating Lenders.
• Review and approval/rejection requests for credit
  enhancement that have material exceptions from
  the Underwriting Standards.
• Review and approval/rejection of workout
  proposals on defaulted Project Loans including
  the appointment of a special servicer and the
  approval of workout milestones.

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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUNDLoan
Terms

• Up to 3 year term
• 400,000 to 7,500,00
• 40 per buildable sf for 100 affordable
  developments
• 50 per buildable sf for mixed use developments
• Loan to Value
• For-profit Borrowers 95
• Non-profit Borrowers 120 plus capitalized
  interest up to 130
• Minimum 5 cash equity from Borrower to be
  expended or escrowed at initial closing
• Borrower Recourse
• For-profit 25 recourse to Borrowers
  principals
• Non-profit 25 recourse to Borrower
• Project Loan Rate
• PRIME (7.75) - 1.70 .50 fee to Fund .25
  servicing fee .05 agent fee .05 Fund
  Expenses 6.90

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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND Use
of Proceeds

• Acquisition of Land / Properties
• Construction Soft Costs
• Capitalized Interest
• Predevelopment and Environmental costs (including
  remediation)
• Architectural Plans
• Feasibility Consultants