According to a release, a total of $177.5 million of series Land M bonds are outstanding, including just under $63.8 million ofsub-series M-1 and $25 million of sub-series M-2. Fitch says thatin addition to the BofA LOC, other factors prompting its ratingactions include conversion of the interest rate on the bonds froman auction-rate mode to a weekly rate mode and HFA's reoffering ofthe bonds in a weekly rate mode.

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The rating will expire upon Jan. 14, 2012, the stated expirationdate of the LOC, unless the date is extended; any prior terminationof the LOC; or defeasance of the bonds, whichever comes first. TheLOC provides full coverage of principal plus an amount equal to 56days' interest at a maximum rate of 12%, based on a 365-day yearand purchase price for tendered bonds, according to Fitch. Theremarketing agent for the series L and sub-series M-1 bonds isCitigroup Global Markets, while Ramirez & Co. is theremarketing agent for the sub-series M-2 bonds.

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Earlier this month, HFA issued an RFP to enable localgovernments, nonprofits and other providers to apply for $64.5million in state and federal funds to buy, renovate and then resellor rent foreclosed and abandoned multifamily properties. The funds,provided under the federal Neighborhood Stabilization Program, areaimed at helping neighborhoods most affected by the foreclosure andsubprime crisis.

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According to a release from HFA, it's expected that most of theNSP funds will be used to purchase and rehabilitate foreclosed andabandoned residential properties, as well as to redevelop vacantsites. Although a limited portion of the funds will be used fordemolition and to create local land banks, these uses must be partof comprehensive plans for revitalization or redevelopment of thesites for affordable housing, according to HFA.

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Under federal guidelines, priority will be given to areas withthe greatest percentage of home foreclosures, areas with thehighest percentage of homes financed with subprime mortgages, areaswith the greatest amount of vacant homes and areas likely to face asignificant increase in the rate of home foreclosures, the releasestates. HFA says proposals to purchase and renovate multifamilyproperties through this program must meet a number of criteria,including a strategy for neighborhood stabilization anddemonstrated experience in supervising and administering blockgrant programs. Green building and energy efficiency measures arealso on the agenda

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New York City has been allocated up to $5.3 million through theNSP. Among counties in the New York City metro area, allocationsare as follows: Nassau County has a cap of approximately $1.7million; Suffolk County, $3.5 million, Westchester County, $4.6million, Rockland Clounty, $1.3 million; Dutchess County, $2.1million; and Orange County, $1.1 million. Upstate counties are inline for at least $250,000 each; in the case of Erie County, whereBuffalo is located, the allocation is $3.8 million.

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More than $54.5 million will come from federal funds authorizedby the Housing and Economic Recovery Act of 2008, which Congresspassed last July. Another $10 million in state funds will be madeavailable by the New York State Affordable Housing Corporation, anHFA subsidiary. HFA is overseeing the distribution of NSP funds inNew York State.

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In the release, Priscilla Almodovar, president and CEO of HFAand AHC, says the program reinforces Gov. David Paterson's goal of"utilizing our scarce resources as efficiently as possible duringthese difficult economic times." Proposals must be submitted to HFAby Feb. 10, 2009.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.