First two buildings rehabbed in CityHome Program

Real Estate Weekly, May 4, 1994

Mayor Rudolph W. Giuliani, at a community celebration in the Longwood Historic District of the South Bronx, announced the completion and purchases of two buildings that were rehabilitated under the CityHome Program, a new public/private homeownership initiative.

"The CityHome Program is a perfect example of what can be produced when the private and not-for-profit sectors work hand-in-hand with the City to rescue neighborhoods from ruin and decay," the Mayor said. "Because there are less capital dollars available, the City must rely more and more on combining capital dollars with public/private dollars as is the case with the CityHome Program, or with federal funds as is the case with the SRO Loan Program to continue producing affordable housing for low- and moderate-income citizens. I am convinced that we must continue to develop new creative ways to fund the rebuilding of our communities."

The completed homes are two of the 9 one- to four-family properties located within a four-block area in the Longwood District that will be brought back to their original grandeur at a cost of over $2 million to provide homeownership opportunities for working families who could never otherwise afford to own a home in New York City. Once home to playwright Clifford Odets and General Colin Powell, the six-block Longwood Historic District was designated by the New York City Landmarks Preservation Commission in 1980 because of its distinctive semidetached neo-Renaissance brick structures with features such as mansard roofs with polygonal cone-shaped peaks.

The Longwood homes are part of the first phase of the CityHome Program, which is operated by the Department of Housing Preservation and Development (HPD), in conjunction with The Enterprise Foundation, The Community Preservation Corporation (CPC), Republic National Bank of New York, First Nationwide Bank and six local not-for-profit organizations. Under Phase I of this program, 76 small, vacant City-owned buildings containing 218 units will be rehabilitated and sold to families earning between $20,000 and $40,000.

The Longwood buildings are being rehabilitated with $1.2 million in City capital funds, and a $1.1 million construction loan from CPC. The brick and limestone facades of these historic buildings are being restored with a $117,000 grant from the New York City Landmarks Preservation Commission Facade Improvement Program.

Also under construction in the first phase of the CityHome Program are 36 one- to four-family properties containing 80 units and six properties that together contain 42 limited equity cooperatives. They will be rehabilitated at a cost of $12.5 million including $7.5 million non-amortizing loan and a $4.5 million construction loan from CPC. The remaining 25 properties, containing 69 units, are scheduled to begin construction in June 1994. These properties are located in the Mount Hope section of the South Bronx, the East New York and Bedford Stuyvesant sections of Brooklyn, Jamaica, Queens and the West and Central Harlem sections of Manhattan.

The purchase prices of the homes range from $75,000 for a onefamily. home to $140,000 for a four-family home. The minimum downpayment required for the one- and two-family homes is five percent of the purchase price and 10 percent for the three- and four-family homes. The cost of the limited equity cooperatives range from $2,400 for a two-bedroom unit to $3,000 for a threebedroom unit. The monthly maintenance charge for a two-bedroom cooperative unit is $320 and for a three-bedroom unit, $400.

The Republic National Bank of New York will offer mortgages with no points charged to qualified buyers. First Nationwide Bank will provide the underlying mortgage for the limited equity cooperatives. A grant of $215,000 also was provided to the First Nationwide Bank by the Affordable Housing Program of the Federal Home Loan Bank of San Francisco to make the limited equity cooperatives in the Mount Hope section of the Bronx even more affordable.

Under the terms of the CityHome Program, the City sold the properties for one dollar each to the Enterprise Foundation, a national non-profit organization dedicated to creating the affordable housing for low-income families. The Enterprise Foundation issued a Request for Qualification (RFQ) to select six locally based Community Development Corporations (CDCs) to market the properties and to select buyers.

In addition to providing the construction loan financing, CPC selected the contractors to rehabilitate the buildings. CPC, which is responsible for overseeing the construction work, is a consortium of private commercial and savings banks.

"We are delighted to have participated in the financing and development of these affordable new homes," said Michael D. Lappin, president of The Community Preservation Corporation. "I want to praise the extraordinary level of creativity and cooperation among all the players in the private sector - and from our colleagues in government for shaping the program, setting responsible standards, expediting the process and supplementing the financing with crucial grants to preserve and restore historic facades," Lappin said.