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PRESENTATION
Project financing structure and funding sources
0:24:26
ยท
88 sec
The project utilizes a complex financing structure that combines various funding sources to make the cooperative conversion financially viable and affordable for residents.
- The majority of funding comes from a city capital loan of approximately $560,000 per unit.
- The city loan has $0 debt payments and $0 interest payments for 40 years, matching the term of the Article 11 property tax exemption.
- An Article 11 tax exemption will reduce or eliminate property taxes for at least 40 years.
- The project is applying for New York State AHC funding of $75,000 per dwelling unit (non-repayable).
- Sales proceeds from occupied and vacant units will help finance the project.
- The subsidized acquisition cost of $1 per building significantly reduces the total development cost.
Regina Lovitt
0:24:26
The typical financing for a co op project is the majority is paid through a city capital loan, which will be provided in the amount of approximately $560,000 per unit.
0:24:36
There will be $0 debt payments and $0 interest payments for forty years to match the term of the article 11 property tax exemption we are seeking.
0:24:45
If the co op chooses to stay under a regulatory agreement, then there will be a no loan payment due and no and $0 debt payments for the forty year regulatory period.
0:24:55
Although HPD anticipates that the buildings will be able to renew the regulatory period and indefinitely defer any payments on the city loan at the end of the forty year term, generating permanently affordable homeownership units for the city.
0:25:09
HPD's loan does not impact the maintenance fee amount because, as discussed in an earlier slide, the maintenance fee amount has been set to cover the building expenses, and the HPD loan is not an expense due to its $0 monthly payment.
0:25:20
The article 11 tax exemption that we're applying for will reduce the reduce and eliminate the property tax cost on the building for at least forty years, if not longer.
0:25:29
Because the buildings are currently city owned, the subsidized acquisition cost of $1 per building also brings down the total development cost significantly.
0:25:37
And lastly, this project is applying to receive funding through New York State, AHC, in the amount of $75,000 per dwelling unit, which will not be repaid.
0:25:46
The sale the sales proceeds from both the occupied units plus primarily from the vacant units will help to provide funds to finance the project.
0:25:54
Okay.
0:25:54
Next slide, please.