Amalgamated Bank

Housing Loan Program

During the last 17 years, the Program has provided over $300 million in unsecured loans to residential buildings in New York City. The financing is used to make major repairs or improvements to multifamily structures and make them more energy efficient.

Q: When did Amalgamated Bank launch its Housing Loan Program?
A: Amalgamated's Housing Loan Program was started in 1992 to provide a source of affordable financing to residential housing developments that primarily serve moderate and middle-income residents. The first properties to receive loans were those in New York State's Mitchell-Lama Housing Program. These housing developments were largely built in the 1950s and '60s. By the 1990s, many of these buildings were in need of major improvements. However, the buildings were restricted by law from taking on any secondary mortgage financing. Amalgamated started working with agencies such as The New York City Department of Housing Preservation and Development and The New York City Housing Development Corporation to develop a program to provide unsecured financing to these housing developments. Today, a significant portion of the program's portfolio includes loans to Mitchell-Lama properties. In addition, these loans help Amalgamated Bank meet its lending commitments under the Community Reinvestment Act.

Q: How is the unsecured financing, which is provided by the Housing Loan Program, used by housing developments?
A: The funds are used in a variety of ways but the most typical use is to finance major capital improvements. This might include things like facade repair, roof replacement or new windows. In some instances, these improvements are strictly for the purpose of making energy related capital improvements. Under this scenario, borrowers often apply for New York State Energy Research and Development Authority (NYSERDA) financing.

Q: What is a typical example of an apartment building that has received financing through Amalgamated's Housing Loan Program?
A: We recently approved a $350,000 loan to an 86-unit, multifamily building in the Bronx. Families with low to moderate incomes live in this rental building, which has retail stores on the ground level. In addition to providing financing for general repairs and major improvements, the building managers plan to make the overall building more energy efficient. This project in the Bronx will also contribute to the local economy by improving the quality of this residential housing and creating jobs.

Q: What is the Housing Loan Program's level of participation in NYSERDA's Energy $mart Program?
A: Amalgamated Bank has been an active NYSERDA lender. In fact, in terms of volume, Amalgamated is the number two NYSERDA lender in the State. One of the program's goals is to reduce energy demand in multifamily residences and to encourage participation, the State has provided an interest rate subsidy to borrowers. Our first NYSERDA loans were to Mitchell-Lama housing complexes. The financing was used to retrofit multifamily residences with equipment, building materials and technology to make them more energy efficient. Renovations often include installing new exterior windows and doors, replacing insulation and upgrading existing mechanical and HVAC systems. NYSERDA has stringent requirements and participation in the Smart Loan program requires a minimum energy savings threshold of 20 percent.

Q: How has participating in NYSERDA's Energy $mart Program changed the scope of the Housing Loan Program?
A: We now provide unsecured financing to private co-ops and condominiums as well as multifamily rental buildings for the purpose of improving energy efficiency. Amalgamated Bank has built a solid relationship with NYSERDA and we are often referred business directly from NYSERDA or many of NYSERDA's engineering partners. It has allowed us to broaden our reach to borrowers other than Mitchell-Lama developments. Additionally, as many of the buildings work with property managers, these management companies are also a source of business referrals for the Bank.

Q: What are some of factors that contributed to Amalgamated's success in this segment of the banking business?
A: First, we provide a high level of service and we have a solid reputation. We have also developed a good working relationship with many governmental agencies that oversee some of the housing developments. Because of our long track record, we have the ability to turn these loans around relatively quickly. Our understanding of the nature of these borrowers and their nuances also provides us with a competitive advantage.

Q: Amalgamated's Housing Loan Program has a 17-year record of success, what lies ahead?
A: The Housing Loan Program's record of success is quite remarkable-every loan that has ever been made under the program has been fully repaid. We have made these loans to properties throughout the State. Amalgamated remains committed to the Housing Loan Program and we will continue to support this business. The goals of the Housing Loan Program, which was created to help maintain, preserve and improve New York City's stock of affordable, multifamily buildings, are a reflection of the Bank's core principles and mission.

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