Al-Khafaji explains financing structure and Article XI tax exemption

Typical financing for co-op projects is majority paid for through a city capital loan, which will be provided in the amount of $500,000 to $700,000 per unit.

There will be zero debt payments and zero dollar interest payments for 40 years tied to the Article 11 property tax exemption.

And the first loan payment will be due to the city after 40 years, only if the co-op chooses to exit affordability.

If the co-op chooses to stay under the regulatory agreement, then there will be no loan payment due and zero dollar debt payments.

HPD's loan does not impact the maintenance fee amount because, as discussed earlier, the maintenance fee amount has been set to cover the building expenses and to add an affordability metric.

The subsidized acquisition cost of $1 per building, because the buildings are currently city-owned, also brings down total development costs significantly.

This project is also receiving funding through New York State Grant Affordable Housing Corporation, or AHC, which will not be repaid.

Sales proceeds from both the occupied units, but primarily from the vacant units, will help provide funds to help finance the project.

And lastly, the New York State Energy Research and Development Authority, or NYSERDA, Clean Edison, or Con Edison Clean Heat, and New York State Community Controlled Affordable Housing, which are all grants provided by the state, which are not repaid.

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