$40M Storm Recovery Loan Fund Launched
Mayor Bloomberg, the city’s Department of Housing Preservation and Development (HPD), Community Preservation Corporation (CPC), and Housing Development Corporation (HDC), together with Citi Community Capital, recently launched the Storm Recovery Loan Fund, a pilot program to provide up to $40 million in low-cost loans to fund the repair of multifamily buildings damaged by Hurricane Sandy.
According to the press release, owners can put the funds toward resiliency measures, like installing state-of-the-art heating and electric plants that are repositioned to withstand the next storm by being located on higher floors and/or in waterproof compartments. This focus on mitigation will decrease the cost of recovery and reduce the destructive impact of future storms. The program will also promote green improvements that will conserve energy and save money over the long term. The new fund blends a subsidy from HPD with CPC financing to provide loans that are below market rate, allowing owners to make needed repairs in the aftermath of Sandy.
“These loans will enable multifamily property owners to restore buildings to working order and allow hundreds of residents displaced by Sandy back in their homes,” said Mayor Bloomberg. “The goal of the funding is not only to have these owners remediate hazardous conditions, but also to encourage them to make improvements that increase resiliency to climate-related events.”
HDC will provide a 10 percent first loss credit enhancement on construction loans financed through the program. In this pilot phase, the majority of applications for the Storm Recovery Loan Fund will be primarily for buildings between five and 45 units, although larger buildings will be considered. Applications are accepted on a rolling basis and funding is available both to repair storm damage and to mitigate the potential impact of future storms.
Both for-profit and not-for-profit owners of multifamily buildings in NYC are eligible to apply for the Storm Recovery Loan Fund. Loan proceeds may be used for repair work ranging from systems replacement and storm mitigation retrofits to gut rehab, where necessary. Storm Recovery loans may have up to a 30-year term. CPC’s portion of the loan will have a rate of approximately 4.5 percent, and HPD’s funds have an interest rate of 1 percent, for a blended rate below other conventional financing.
In addition, all projects must comply with HPD standard specifications and substantial rehab projects must achieve Enterprise Green Communities certification. In keeping with NYC’s Greener Greater Buildings Plan, all of the properties financed under this program will be benchmarked for energy usage and retrofits for energy savings will be included in their scopes of work. All buildings burning #6 oil will be converted to comply with the city’s Clean Heat initiative. In addition, gut rehab projects must meet HPD’s construction specifications and design guidelines.
More information about the program can be found at www.nyc.gov/html/hpd/downloads/pdf/CPC-Storm-Recovery-Term-Sheet.pdf.