What you should know about the Affordable New York Housing Program (ANYHP)

Formerly known as 421-a, the Affordable New York Housing Program (ANYHP) was signed into law on April 10, 2017, by Governor Andrew Cuomo. ANYHP renews and extends 421-a, which allows developers in New York City to buy property, obtain financing and construct residential projects while considerably reducing the property taxes of these projects by making certain percentages of the units affordable:

· Rental units must be at least 25 percent or 30 percent affordable.

· Homeownership projects must be 100 percent affordable.

Please note, each type of project must also meet additional requirements.

Due diligence considerations

New projects and those under construction can qualify for ANYHP benefits:

· Projects "grandfathered" under the old 421-a program (those that began construction by December 31, 2015), may choose to opt-in to ANYHP.

· If projects switch from the old 421-a program to the new ANYHP program, they may have to maintain their eligibility for the old program until they receive confirmation of their ANYHP eligibility.

· Projects beginning construction from January 1, 2016, to June 15, 2022, and completing construction by June 15, 2026, may qualify for ANYHP.

· It must be clear that the project will qualify for ANYHP.

ANYHP considerations for lenders

Be advised that the new ANYHP application process is different from the old 421-a process. Applications are now accepted only after construction is completed, for example the issuance of TCO or CO for all residential units. The timeline for receiving benefits has not been defined and it may be months before HPD issues an ANYHP Certificate of Eligibility.

HPD does not issue opinions of counsel regarding a project's eligibility for ANYHP benefits. Lenders should obtain an opinion of counsel.

Loan documents should include milestones for the application process, including:

· HPD approval of certain ANYHP requirements that can be obtained prior to construction completion.

· HPD approval of marketing materials. A Notice of Intent to Market must be filed with HPD nine months prior to completion date.

· HPD requires an ANYHP Restrictive Declaration to be executed and recorded against the property, plus all affordable units and certain market units rented and registered with DHCR.

· It is currently unknown how long the HPD will take when processing and approving ANYHP applications. Loan documents should allow nine months post-completion of construction for issuance of ANYHP Certificate of Eligibility, with additional time provided that the borrower is diligently pursuing the same.

To learn more about ANYHP benefits for rental and homeownership options, please click here. Additional questions or concerns can be addressed by the experienced attorneys at Rosenberg & Estis.

This is published by the law firm Rosenberg & Estis, P.C. It is not intended to provide legal advice or opinion. Such advice may only be given when related to specific fact situations that Rosenberg & Estis, P.C. has accepted an engagement as counsel to address.

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