HFA Issues New 80/20 Rules

Faced with more demand for tax-exempt bonds than it has been allocated under the private-activity volume cap, the New York State Housing Finance Agency last week released expanded guidelines for its 80/20 housing program.

“These criteria are guidelines that will help HFA decide how to allocate a scarce resource at a time when demand exceeds the supply of available volume cap this year,” HFA spokesman Phil Lentz said in an e-mail. “The more criteria developers are able to satisfy, the better chance they have of securing volume cap for their projects.”

One criterion by which projects will be evaluated is whether affordability is maintained beyond that required in the HFA’s standard regulatory agreement — which is for the life of the bonds. Other criteria include the inclusion of housing for special needs populations, having construction approvals from the city, being in compliance with New York City’s planning and development goals, and participation in one of the New York State Energy Research and Development Authority’s energy-efficiency programs.

The HFA also increased the dollar amount allowed for each affordable unit from $1.5 million to $1.7 million. It anticipates allocating up to $1 billion in volume cap over the next three years for New York City multifamily rental projects, a figure that includes $311 million 80/20 projects already approved.

Under the HFA’s 80/20 program, developers of multifamily rental housing must reserve at least 20% of the units for households with incomes at or below 50% of the area median income, or 25% of the units for households with incomes at or below 60% of AMI.

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