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LISC NYC’s affordable housing lending program exceeded its record-setting goal of $25 million in closed loans to date in 2017, yielding a portfolio that combined small, high impact loans with those that had particular complexity.
“As a CDFI our niche has always been to take on lending that doesn’t appeal to traditional financial institutions,” says Arturo Suarez, LISC NYC’s Housing Director. “The loans we originate tend to be smaller, riskier, or more complicated to get to the closing table.”
As an example, Mr. Suarez pointed to LISC NYC’s $3.4 million bridge loan to 101 South 3rd Street, a 35-unit housing development being rehabilitated and preserved as permanent affordable housing by the Brooklyn nonprofit Southside United HDFC-Los Sures (Los Sures). LISC NYC’s loan bridged proceeds from the sale of inclusionary zoning certificates, generated by Los Sures through the rehabilitation of their building, which were then sold as a density bonus to a nearby private development through the City of New York’s Inclusionary Housing Program. The risk profile of this complicated transaction, which involved relying on a third party developer to fund the South 3rd Street renovation, made this a perfect fit for LISC NYC.
LISC NYC staff also acted as early movers on innovative, highly impactful affordable housing developments led by nonprofit developers Fifth Avenue Committee (FAC) and MHANY Management Inc. Small and unsecured by real estate, these $250,000 loans are typically avoided by banks because of their risk profile and the small amount of revenue that they generate, relative to the work loan officers must devote to getting them closed. They are hugely catalytic, however, advancing projects of enormous benefit to their communities. FAC’s $25.2 million Sunset Park Library project, for example, will combine 50 units of permanently affordable housing with a brand new, expanded state-of-the-art branch of the Brooklyn Public Library, which will be nearly double the size of the current branch library. MHANY’s 1921 Cortelyou project in Ditmas Park, Brooklyn will provide 76 units of affordable and supportive housing, while also providing new worship space for Baptist Church of the Redeemer, a longtime community anchor.
“It’s fabulous to see all these great projects coming out of our core housing lending work,” says Sam Marks, Executive Director of LISC NYC. “As the affordable housing industry continues to evolve and achieve scale, our staff thrives on working through these complex, challenging transactions.”