Tahl Propp Equities’ acquisition and renovation of five affordable housing properties in Harlem containing a total of 549 apartments. In partnership with the New York City Department of Housing Preservation and Development (HPD), all 529 units will be reserved for low-income tenants for the next 40 years. In addition, all five buildings have federal Section 8 contracts, further preserving affordability through rental subsidies for the property owners. Bellwether Enterprise provided $62,340,000 in tax-exempt bond financing and Enterprise syndicated $41,753,633 in Low-Income Housing Tax Credit equity to finance the deal.
The five properties are Gladys Hampton Houses (2411 Frederick Douglas Blvd), New West I and II (8-68 West 111th St), and Riverside I and II (602-622 West 135th St). Tahl Propp Equities will invest nearly $30 million in renovations including roof replacements, new windows and boilers, updates to common areas, and unit interiors with new kitchen cabinets, appliances, flooring, and bathroom fi xtures, bringing the total development cost to approximately $133,188,500. The renovations will be done with tenants in place. Some units will be set aside for individuals and families who are homeless or at risk of becoming homeless. Tahl Propp purchased the buildings ten years ago, which were distressed, and worked with the city to devise a way to preserve this much-needed affordable housing in Harlem, a rapidly gentrifying neighborhood.
To finance the loan, Bellwether Enterprise arranged a Fannie Mae credit enhancement for two series of bonds issued by the New York City Housing Development Corporation (HDC). $38,140,000 in long-term bonds and short-term bonds totaling $24,200,000 funded construction and were used to meet the 50 percent test for generating an automatic allocation of 4 percent Low Income Housing Tax Credits. New York City Housing Preservation and Development (HPD) provided a second mortgage of nearly $15,274,500.
Fannie Mae’s Reduced Occupancy and Rehabilitation (ROAR) program underwrote the property’s credit enhancement and eliminated the need for a construction loan. The building will remain at full occupancy and maintain its flow of Section 8 revenue as it undergoes construction, allowing for a more efficient renovation.