Tax-Exempt Loan Helps Structure NYC RAD Deal

October 24, 2019                              By: Multifamily Executive

$192.2 million public housing project demonstrates the power of creative teamwork.

Brought to you by Freddie Mac Multifamily

The Hope Gardens NYCHA development in Brooklyn, NYC | Courtesy: Hunt Companies (Photo: Michael Ratliff)

The story and great lesson of the $192.2 million Hope Gardens portfolio acquisition and renovation can be summarized in seven words: Where there’s a will, there’s a way.

The ”way” involves the enabling Rental Assistance Demonstration (RAD) conversion of 1,321 New York City public housing units to clear the way for an ambitious and desperately needed renovation program. The immediate list of improvements includes everything from new boilers and wiring to updated kitchens and bathrooms. Longer term, the conversion ensures Hope Gardens residents in Brooklyn’s Bushwick neighborhood gain the permanent stability and peace of mind of housing affordability.

The federal RAD program seeks to improve and preserve at-risk public housing developments by allowing the properties to convert to long-term Section 8 rental assistance contracts. This is critical because it puts the housing authorities in better position to leverage additional financing to perform needed improvements.

Still, the road to closing was a challenge, requiring an impressive array of creative strategies and tools— tax-exempt loans, low-income housing tax credits and other funding sources; rent blending; and judicious risk taking by all players factored into the deal............................Read More