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NYC Affordable Housing Acquisition Loan Fund

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					New York City Affordable Housing Acquisition Loan Fund
Overview
April 18, 2006 Prepared by Forsyth Street Advisors

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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND
Changing Circumstances Demand a New Approach
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For over 20 years, vacant city-owned property has been the primary source of land and buildings for affordable housing development. As of 2005, a vast majority of New York City’s in rem housing stock of property has been returned to private ownership. Today, affordable housing developers confront:
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a scarcity of development sites, high land costs, environmental compliance considerations, competition from private developers, significant financial barriers.

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The NYC Affordable Housing Acquisition Loan Fund represents a new approach to address these acquisition obstacles.
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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND
Decline in In Rem stock: 1979 - 2004
110,000 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 1979 1984 1989 1994 1999 2004 Occupied Vacant TOTAL

Source: HPD Production Credit System

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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND
Flow of Funds
Fund Manager Credit Committee HPD and HDC: “Soft” commitments of future funding

Foundation PRIs $32 MM

Fund Guarantee Pool City Funds $8 MM

New York Acquisition Fund, LLC: Managing Member: Enterprise Community Investment

Borrowers Originators (Experienced CDFIs and HDC) Borrowers

Borrowers

Senior Debt Senior Lender Revolving Credit Line

Member: National Equity Fund

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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND
Originating Lenders and Servicers

 Loan underwriting delegated to experienced CDFIs (Originating Lenders).  Originating Lenders will originate and service Project Loans.

 Originating Lenders include:
     Corporation for Supportive Housing Enterprise Community Loan Fund Local Initiatives Support Corporation Low Income Investment Fund New York City Housing Development Corporation
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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND
Credit Committee
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A six person Credit Committee will be responsible for the:
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Approval of Originating Lender Criteria and approval of prospective Originating Lenders. Review and approval/rejection requests for credit enhancement that have material exceptions from the Underwriting Standards. Review and approval/rejection of workout proposals on defaulted Project Loans including the appointment of a special servicer and the approval of workout milestones.
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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND
Loan Terms
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Up to 3 year term $400,000 to $7,500,00
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$40 per buildable sf for 100% affordable developments $50 per buildable sf for mixed use developments
For-profit Borrowers – 95% Non-profit Borrowers – 120% plus capitalized interest up to 130%

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Loan to Value
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Minimum 5% cash equity from Borrower to be expended or escrowed at initial closing Borrower Recourse
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For-profit – 25% recourse to Borrower’s principals Non-profit – 25% recourse to Borrower

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Project Loan Rate
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PRIME (7.75%) - 1.70% +.50% fee to Fund +.25% servicing fee + .05% agent fee +.05% Fund Expenses = 6.90%
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NYC AFFORDABLE HOUSING ACQUISITION LOAN FUND
Use of Proceeds

Acquisition of Land / Properties  Construction Soft Costs  Capitalized Interest  Predevelopment and Environmental costs (including remediation)  Architectural Plans  Feasibility Consultants
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