New York City Acquisition Fund

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New York City Acquisition Fund

• SHNNY Conference 2008
• Diane Louard-Michel, CSH Tyler Van Gundy,
  Forsyth Street Advisors Moshe Mckie-Krisberg,
  CSH Abby Jo Sigal, Enterprise Tim OHanlon,
  NYC HPD Tony Hannigan, CUCS Robert Sanborn,
  Westhab, Inc.

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NEW YORK CITY ACQUISITION FUND

• Overview and Structure
• A collaboration between NYC, intermediaries,
  foundations and financial institutions to
  stimulate affordable housing development and
  preservation.
• Structured financing allows for risk sharing
  among participants
• Meets high-priority and growing need for
  acquisition and predevelopment financing for
  affordable housing.
• 230 million fund creates or preserves 30,000
  units of affordable housing over 10 years.

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NEW YORK CITY ACQUISITION FUND

• Concept Key Principles
• Loans are originated through a delegated
  underwriting system to accelerate the origination
  process
• Loans available to not-for-profit and for-profit
  developers
• Originating lenders participate in guaranteed
  loans from Fund through a top loss of 2 of total
  loan amount.
• Need for speed and flexibility
• Fits into existing City and State Programs

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NEW YORK CITY ACQUISITION FUND

• Foundation support    
• Starr Foundation Ford Foundation
• Rockefeller Foundation F.B. Heron
  Foundation
• Open Society Institute Bernard F. Alva
  B. Gimbel Foundation
• Robin Hood Foundation New York
  Community Trust
• MacArthur Foundation
• Bank support
• JP Morgan Chase (Agent) US Trust
• Bank of America Bank of Tokyo-Mitsubishi
• Citibank Commerce Bank, N.A.
• Deutsche Bank M T Trust Company
• Fannie Mae Merrill Lynch
• Wachovia Mizuho Corporate Bank (USA)
• HSBC Bank USA, N.A. Signature Bank
• Capital One Bank
• Washington Mutual Bank
• CDFI Originators

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NEW YORK CITY RETURNS
HPD INVESTMENTS IN THE SOUTH BRONX (1986-2006)
HPD INVESTMENTS IN HARLEM (1986-2006)
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NEW YORK CITY RETURNS
Boston Road, the Bronx
1993
1998
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NYC POPULATION WILL GROW TO OVER 9 MILLION BY
2030
New York City, 1950-2030
Projected
Historic
Historic Enumerations (adjusted)
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BUILD FUTURE PIPELINE FOR AFFORDABLE HOUSING
DEVELOPMENT
In rem stock has declined from over 100,000 units
to 977
Number of units in In rem stock in New York City,
1979-2006
Source HPD Production Credit System
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BUILD FUTURE PIPELINE FOR AFFORDABLE HOUSING
DEVELOPMENT
Rising sales prices have made land acquisition
more difficult
Annualized Change in Vacant Land Prices, 1999 to
2004
Source NYU Furman Center for Real Estate and
Urban Policy NYC Department of Citywide
Administrative Services
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NEW YORK CITY ACQUISITION FUND

• 1970s and 80s City took thousands of abandoned
  buildings and vacant lots in tax foreclosure
• In Rem stock that has created over 270,000 units
  of affordable housing is now gone
• Shortage of City-owned land requires affordable
  housing developers to compete in the private
  market
• Market requires equity and speed
• Fund allows smaller or nonprofit developers to
  compete for properties in New Yorks real estate
  market

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NEW YORK CITY ACQUISITION FUND

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NEW YORK CITY ACQUISITION FUND

• Fund Manager Role
• Oversight of day to day operations
• Daily interaction with the Originating Lenders
• Management of the Funds Credit Committee
• Management of the Funds general operations

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NEW YORK CITY ACQUISITION FUND

• Total Closed plus Approved/Submitted Project
  Loans in excess of62,000,000.
• 2008 Closed plus Approved/Submitted Project Loans
  in excess of 30,000,0000.
• Over 1,500 units and 13 loans closed and 4 about
  to close and 3 submitted.
• Payoffs of 4 Project Loans totaling more than
  25,000,000.
• Project Loan size varies.
• In excess of 13,000,000.
• Multiple of approximately 3,000,000.
• Bulk of Project Loans are 2,000,000 or less.
• Strong Pipeline

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Loan Types
NEW YORK CITY ACQUISITION FUND
Prepared by Forsyth Street Advisors LLC
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NEW YORK CITY ACQUISITION FUND
Supportive Housing Project Loans

• 7 Supportive Housing Project Loans
• Primarily less than 2,000,000
• Expected Construction Financing Sources
• HPD Supportive Housing Loan Program
• HPD 9 LIHTC
• Homeless Housing Assistance Program
• DHCR 9 LIHTC
• HDC Tax Exempt Bond Financing
• DHCR Housing Trust Fund
• HPD Resolution A Funds

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Expansion of Expected Construction Financing
Source
NEW YORK CITY ACQUISITION FUND

• New York State Office of Mental Health
• Housing Urban Development 811

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Projects Closed/Approved/Submitted Projects in
Pipeline
Single Blight Designation Multiple Blight
Designations
4/18/2008
www.nycacquisitionfund.com Prepared by Forsyth
Street Advisors LLC
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Projects Closed/Approved/Submitted Projects in
Pipeline
Single Blight Designation Multiple Blight
Designations
4/18/2008
www.nycacquisitionfund.com Prepared by Forsyth
Street Advisors LLC
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Projects Closed/Approved/Submitted Projects in
Pipeline
Single Blight Designation Multiple Blight
Designations
4/18/2008
www.nycacquisitionfund.com Prepared by Forsyth
Street Advisors LLC
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Projects Closed/Approved/Submitted Projects in
Pipeline
Single Blight Designation Multiple Blight
Designations
4/18/2008
www.nycacquisitionfund.com Prepared by Forsyth
Street Advisors LLC
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Principal Conforming Loan Terms
NEW YORK CITY ACQUISITION FUND

• Up to maximum 3 year loan term
• Loan amount up to 7,500,000 (land acquisition)
• Loan amount up to 15,000,000 (preservation)
• Loan to Value (calculated based on the lower of
  appraised value or purchase price)
• For-Profit Borrowers up to 95
• Non-Profit Borrowers up to 120 plus
  capitalized interest up to 130
• Minimum 5 cash equity from borrower to be
  expended at closing
• For-Profit Borrowers minimum 5 Cash
• Non-Profit Borrowers minimum 5 Cash (1/5 of
  which can be in-kind contribution)
• Borrower Recourse
• For-profit minimum of 25 recourse to
  borrowers principals
• Non-profit minimum of 25 recourse to
  borrowers parent organization
• Project Loan Rate
• Variable rate, indexed to PRIME (Currently
  4.4)

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NEW YORK CITY ACQUISITION FUND

• Basic Underwriting Components
• Soft Commitment Letter provided by HPD, HDC or
  other governmental organization or long term
  financier, acceptable to the Fund
• Phase I ESA ordered by the Originating lender or
  Borrower by approved Environmental Vendor
• Appraisal ordered by the Fund
• Project Loan Underwriting, prepared by
  Originating Lender and Borrower

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Use of Proceeds
NEW YORK CITY ACQUISITION FUND

• Acquisition of Land / Properties
• Costs of obtaining take-out financing
• Capitalized Interest
• Predevelopment and Environmental costs (including
  remediation)
• Architectural Plans
• Feasibility Consultants
• Carrying Costs
• Tax Credit Application
• Legal Fees
• Title

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Role of HPD (and other City and State housing
agencies)
NEW YORK CITY ACQUISITION FUND

• Soft Commitment Letters HPD (and/or other
  agency) issues soft commitments to Borrower as
  part of loan application to Fund.
• Borrower may seek construction/permanent
  financing from HPD (and/or other agency) programs
  that will take out acquisition loan at end of
  term.
• Fund Credit Committee requires soft commitment
  letters from HPD (and/or other agency) in order
  to approve loan.
• Once soft commitment letter is issued, the
  referenced project is added to pipeline for the
  particular HPD (and/or other agency) financing
  program.

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2013-2017 Hughes Avenue, BronxCenter for Urban
Community Services, Inc. and CSH
NEW YORK CITY ACQUISITION FUND

• 2.875 million acquisition and predevelopment
  loan
• Site acquisition cost 2.1 million
• 2 tax lots/new construction of 90 units for
  singles and families
• Permanent financing HPD SHLP
• Capital Financing
• 9 LIHTC
• SRO Supportive Services funding from OTDA/DHS and
  NY/NY III from DOHMH
• Projected TDC 25 million
• Sites identified in July 2007
• Closing May 2008

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986 East 181st Street, BronxWesthab, Inc. and
Enterprise Community Loan Fund
NEW YORK CITY ACQUISITION FUND

• 1,820,000 acquisition and predevelopment loan
• Site acquisition cost 1,400,000
• New construction of 40 units for singles and
  families
• Mix of moderate income, low income and supportive
  housing units
• Permanent Financing
• HPD MIRP HTF
• 9 LIHTC
• Supportive services
• Office of Mental Health
• Local VA
• Projected TDC 14,600,000

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Questions???
NEW YORK CITY ACQUISITION FUND

• http//www.nycacquisitionfund.com/
• Originating Lenders