The Puerto Rico Housing Finance Authority (PRHFA), in partnership with Citi Community Capital, a department of Citigroup's Municipal Securities Division, has created a revolving loan fund that will provide capital for the construction of for-sale single-family and multifamily homes for low- and moderate-income residents of Puerto Rico. The Puerto Rico Community Development Fund, a subsidiary of the PRHFA, will utilize its 2009 New Markets Tax Credit (NMTC) allocation for the transaction.
According to the PRHFA, the fund fills a void created by the lack of existing traditional financing sources in the construction lending market in Puerto Rico. Citing data from the consulting firm Estudios Tecnicos, the PRHFA notes there is a ‘considerable pent-up demand of approximately 10,000 for-sale units annually to low-income individuals.’
The fund's activity will be targeted to disadvantaged communities of higher economic distress, namely those with poverty rates in excess of 30% and unemployment rates at least 1.5 times the national average.
‘The PRHFA team has worked on this transaction for three long years,’ says PRHFA Executive Director George Joyner. ‘To the best of our knowledge, the use of NMTC to create a revolving construction loan fund is unique for this program. We hope this transaction serves as an example for other NMTC recipients, so they too will use their NMTC creatively and not accept the dictum 'it has never been done' as the final word on any challenge they may face.’