Twenty percent of the units in Carnegie Hill Terrace I are reserved for low-income residents. HFA provided $35.6 million for the construction of the complex, which is located on Manhattan's Upper East Side.
HFA offers tax-exempt financing to multifamily rental developments in which at least 20% of the units are set aside for low-income residents-so-called "80/20" projects
According to the Federal Tax Code, at least 20% of the units must be set aside for households with incomes at 50% or less of the local Area Median Income (AMI), adjusted for family size. Alternatively, 40% or more of a project's units (25% in New York City) must be affordable to households whose income is 60% or less than the local AMI, adjusted for family size.
Under the 80/20 program, for specific periods of time 20% of a project's units must remain affordable to low-income households and these units will be subject to a Regulatory Agreement between the owner and HFA. HFA's Regulatory Agreement assures that the maximum rent on these affordable units cannot exceed 30% of the applicable income limits. The remaining units in an 80/20 project can be rented at market rates.
The tax-exempt bond financing generates 4% "as of right" Low Income Housing Tax Credits (LIHTC), which can either be syndicated to generate part of the required equity a borrower must contribute to the financing or be utilized to offset the borrower's tax payments. All bonds or bond financed mortgages, including those financed under the 80/20 Program, must be credit enhanced.
Credit enhancement provides security for bondholders and ensures a higher rating on the bonds issued, which in turn produces a lower mortgage rate. Click here for more information on credit enhancement options.
Click here for the 80/20 Housing Program term sheet.
Click here for related 80/20 application forms.
Last updated: 3/30/2011