A letter of credit (L/C) has been used in an innovative financing package to fund affordable housing in the East Harlem district of New York.

The housing aimed at extremely low-, very low- and low-income households addresses concerns about the gentrification of what was once one of the poorest regions in the US' financial hub.

Financial close

Developers have now closed on a US$223 million financing that includes an L/C from Bank of America, construction loans, grants from city agencies, federal low-income and solar tax credits, and New York State Brownfield Tax Credits.

The Sendero Verde (Green Path) project features approximately 700 units of affordable housing, community and social service space, a school, publicly accessible open space, community gardens and neighbourhood shops.

Development partners

The developers comprise New York City Department of Housing Preservation and Development, New York City Housing Development Corporation (HDC), L+M Development Partners, Jonathan Rose Companies and Acacia Network.

HDC is contributing US$120 million in bond financing and subsidy to the first phase of the project.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.