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NEW YORK CITY—The Betances Houses in the Mott Haven neighborhood of the Bronx received $120.6 million in Fannie Mae financing from Hunt Real Estate Capital. The portfolio of 1,088 units of existing NYCHA housing will be repaired and converted through the Rental Assistance Demonstration (RAD) and Section 18 Disposition programs of the Department of Housing and Urban Development (HUD).
The borrower is Betances RAD LLC. The Betances NYCHA RAD portfolio comprises 39 scattered site multifamily properties and one community center building. The property includes two- to five-story walk-up buildings, and six- to 20-story buildings with elevators and community facility spaces. The apartments range from studios up to five-bedroom units.
Constructed between 1906 and 1974, the apartments are at the following addresses: 411 E. 136th St., 408 E. 137th St., 416 E. 137th St., 443 E. 137th St., 695 E. 139th St.,699 E. 139th St. and 537 E. 146th St.
“The Betances portfolio will be part of the Rental Assistance Demonstration (RAD) program in which its public housing units will be converted to project-based Section 8 housing with a 20-year [Housing Assistance Payment] HAP contract in-place at closing for 100% of the units,” explains Joshua Reiss, VP at Hunt. ”With the new financing, the portfolio will undergo a significant rehabilitation over a 24-month period after closing with a total construction contract amount of $109 million.”
Upon conversion from public housing, residents will receive rental subsidies through two project-based Section 8 voucher contracts, each for a term of 20 years, with one contract covering the 738 units under the RAD program and a second contract covering the 350 units under the Section 18 program. The conversion will not impact the affordability to the existing residents.
“By converting through the RAD program, the property receives two 20-year project-based rental assistance contracts, thereby preserving affordability for the next 40 years,” adds Reiss. “Working with Fannie Mae to finance this property enables us to leverage our collective strengths to rehabilitate high-quality affordable housing where it is much needed.”
Under the RAD program public and private investments are used to repair and preserve affordable housing. The Betances renovations will include replacement of all flooring, kitchen cabinets, bathroom vanities and tub enclosures. Hunt asserts that the construction will be completed without displacing residents and within four days of the start of work.
Betsy Kim is the bureau chief, East Coast, and New York City reporter for Real Estate Forum and GlobeSt.com. As a lawyer and journalist, Betsy has worked as the director of editorial and content for LexisNexis Lawyers.com, a TV/multi-media journalist for NBC and CBS affiliated TV stations in the Midwest, and an associate producer at Court TV.
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