Financial incentives to construct energy-efficient housing are being offered through New York State Homes and Community Renewal’s Affordable Homeownership Opportunity Program (“AHOP”).

Qualifying Projects: AHOP is available for a variety of housing modalities including newly constructed condominiums and cooperatives, rehabilitated vacant buildings and tenanted building conversions.  Generally, the buildings must have less than 100 apartments, but Homes and Community Renewal (“HCR)” can make exceptions under certain circumstances.

Subsidy Amount:

• AHOP incentivizes developers by providing subsidies which increase with affordability. For example, units at 80% of the area median income (“AMI”) may receive up to $200,000 per apartment, as well as an additional $20,000 subsidy if the building meets “Net Zero” or “Passive House” standards. Subsidies increase as AMI levels deepen.
• To support and encourage sales to homebuyers at or below 80% AMI, HCR may provide down payment assistance to households that qualify.
• Developer fees up to 12% of development costs.

AHOP Highlights:

• Energy cost savings compared to traditional construction – One of the main requirements of AHOP funding is energy efficient design and construction, including full electrification, solar readiness, tight seals and insulation, and high-efficiency windows. AHOP encourages development to “Net Zero” and “Passive House” standards.
• Design Standards – Construction and design plans are subject to review by HCR and, if applicable, the approved construction co-lender.
• Marketing Requirements – Developers must create a marketing plan targeting income-eligible local households, focusing on underserved areas and populations, and first-time homebuyers.
• Construction Loan – HCR’s subsidy would be in the form of a construction loan.
• Lender cooperation with HCR – HCR requires a developer’s primary construction lender to collaborate with HCR, as co-lender, to efficiently administer and manage participation loans.
• Term of Affordability
  • Option 1: During the first ten years, resale purchases would be permitted by those buyers who meet the original AMI criteria (adjusted at the time of the resale purchase) and who assume affordability obligations. After ten years, the home can be resold or refinanced without such restrictions. The home would be subject to a 20% HCR recapture of appreciated value for an additional 20 years.
  • Option 2: Homebuyers will have a 30-year affordability obligation pursuant to an enforcement mortgage. Future sales prices during this period must align with the original AMI criteria, adjusted at the time of sale, and purchase price affordability targets.

If you are interested in exploring homeownership development opportunities such as a condominium or cooperative that is constructed with AHOP, Seiden & Schein, P.C is here to help.

Contact:

Alvin Schein              [email protected]

Adam A. Levenson     [email protected]

David Shamshovich    [email protected]