A non-profit group has purchased the notes for four multi-family properties in Brooklyn, making use of a new city program designed to help affordable housing developers purchase foreclosed properties at reduced prices and preserve them as affordable, the Wall Street Journal reported.
MHANY Management bought the four dilapidated buildings, in the Crown Heights, East New York and Bedford Stuyvesant neighborhoods, with a $1.35 million loan provided by the New York City Acquisition Fund. It was the first time a non-profit purchased an overleveraged note in New York City, the Journal said.
The $60 million fund was introduced in 2010.
Housing advocates say the fund helps keep affordable housing affordable, by leveling the playing field between big developers and smaller, affordable housing developers.
“Private equity is paying a ton of money for notes that aren’t necessarily taking into account rent restrictions and the level of repair that is needed,” said Abby Sigal, vice president at Enterprise, an affordable housing advocacy group. “That may not be what’s best for the building and what’s best for the community.” [WSJ]