Social Impact Investing

The New York City
Acquisition Fund
financial First Investor
Impact First Investor
Financial First
Investors
Prime Rate
Bank Consortium
Senior
Debt
~$160mm
NYC Acquisition
fund
area of impact
Affordable Housing
geography
United States
Impact First
Investors
City of NY +
Foundations
Sub. Debt +
Guarantees
~$40mm
Sub-Market Rate
Investors
••
The New York City Acquisition Fund is an example of a layered structure where Financial First and Impact First
investors invest together in a project with the former earning market rate returns and the latter earning submarket
returns
••
The Financial First investors in the New York City Acquisition Fund are a consortium of banks including Bank of
America, JP Morgan Chase and HSBC
••
The group of Impact First investors is led by the City of New York and includes a number of foundations including
the Ford Foundation and the Rockefeller Foundation
The New York City Acquisition Fund (http://www.nycacquisitionfund.com)
••
The New York City Acquisition Fund was formed in 2006 to overcome the shortage of property available for the
development of affordable housing in New York City
••
The fund seeks to facilitate affordable housing development by providing flexible, advantageous capital for the
acquisition of property to developers of affordable housing
••
The fund is worth approximately $200MM with $162MM provided by the bank consortium and the balance
provided by the Impact First investors led by the City of New York and allied foundations
••
The bank consortium provides senior debt as lending capital while the group of Impact Investors provides
guarantees in the form of low-interest subordinated loans
••
Developers either refurbish existing affordable housing units or engage in new construction of affordable housing
••
The maximum loan amount is $15MM for the acquisition of existing occupied buildings and $7.5MM for the
acquisition of vacant land although the Fund has the flexibility to provide exceptions to these limits
••
The fund lends to both for-profit and non-profit developers; for-profit developers are eligible for loans up to 95%
of the lesser of appraised value or purchase price while the number goes up to 130% for non-profit developers
••
All borrowers must contribute 5% of the total acquisition and pre-development costs as equity
Impact
social/environmental impact
••
The fund aims to develop 30,000 units of affordable housing in a 10
year time span in New York City
••
The success of the fund has spurred the creation of similar funds in
Los Angeles, Atlanta and Louisiana
financial impact
••
The interest rate on loans disbursed by the banks is indexed
to the prime lending rate
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