Owners of and lenders to NYC multifamily properties, please be advised that NYC Department of Housing Preservation & Development (HPD) and NYC Department of Social Services (DSS) on March 7, 2025 announced the following imminent changes to the CityFHEPS rent subsidy program. Clearly, NYC is scaling back the amount of rent subsidies it will be providing.
To discuss what these changes may mean to your residential property and its underwriting, please contact your R&E attorney or Daniel M. Bernstein or Nicholas DiLorenzo . You may also want to discuss with your property’s affordable housing Marketing Agent.
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Announcement from NYC (in italics below):
As part of the City’s ongoing efforts to contain costs and in furtherance of our responsibility to update our programs over time, the New York City Department of Social Services (DSS) and Department of Housing Preservation and Development (HPD) will be adjusting how the CityFHEPS rental subsidy applies to households moving into HPD affordable housing.
The CityFHEPS rental subsidy limits for households moving into HPD affordable units through a Housing Connect lottery or Homeless Placement Services referral process will continue to cover higher-than-standard CityFHEPS rents (“Augmented CityFHEPS”) until June 15, 2027 but will be limited to rents at or below 120% of the 2024 Fair Market Rent (FMR).
Tenants with CityFHEPS who are already in place will not be affected by these limits for the duration of their tenancy. New limits to Augmented CityFHEPS will be implemented in phases, beginning April 15, 2025, as follows:
Tenants selected through Housing Connect lottery:
- For applicants with CityFHEPS who are approved by HPD/HDC for a Housing Connect unit through April 15, 2025, historic Augmented CityFHEPS rent levels will be maintained and will not be subject to new limits.
- For applicants with CityFHEPS who are approved for a Housing Connect unit from April 16, 2025 through June 15, 2027, Augmented CityFHEPS will cover rents up to 120% FMR.
Tenants selected through Homeless Placement Services (HPS) referrals:
- For referrals in process, historic Augmented CityFHEPS rent levels will be maintained if the subsidy package is submitted by September 30, 2025.
- Effective October 1st, 2025, through June 15, 2027, all Augmented CityFHEPS packages submitted to DSS will be subject to the 120% FMR payment standard.
For new projects or units looking to collect Augmented CityFHEPS:
- Starting April 16th, no new units may be referred to HPS using the historic Augmented CityFHEPS standard. Units will be subject to the new payment standard at 120% FMR.
- Any units created (i.e. receive Temporary Certificate of Occupancy) after June 15, 2026 will not be able to collect Augmented CityFHEPS for any tenants.
HPD and DSS teams are ready to discuss the upcoming changes and how it will impact existing and future affordable housing developments with your organization. We thank you for your cooperation and look forward to our continued partnership.