NYCEEC and HPD Offering Interest-Free Retrofit Loans to Affordable Co-ops and Condos

A needed boost. For low- and middle-income co-ops and condominiums, the Climate Mobilization Act has boards asking how they will pay for retrofits that will reduce their buildings’ carbon output enough to satisfy the law and avoid stiff fines. A partial answer comes from the New York City Energy Efficiency Corp. (NYCEEC), a nonprofit lender that is working in conjunction with the city’s Department of Housing Preservation and Development (HPD) to offer interest-free loans to low- and middle-income co-ops and condos that want to explore ways to increase their building’s energy efficiency. 

First things first. These loans can pay for energy audits and architectural and engineering studies that determine the scope of work for projects such as installation of solar panels; upgrading windows, doors and the building envelope; electrification; battery storage; and more. “In order to get construction financing from HPD, boards need an integrated physical-needs assessment,” says Jay Merves, the director of business development at NYCEEC. “We’re able to provide financing for that to encourage these kinds of green measures in affordable housing communities.”

By the numbers. For qualifying buildings, the loans are interest-free up to $100,000 and carry a 2% to 3% rate for larger loans. The loans typically run for two years, and there are no upfront fees. “Pre-development loans are not construction loans,” Merves stresses. “They’re designed to get building owners to the point where they’re able to get permanent financing. They need a loan to bridge the gap while they assess the scope of the project. Then they should look for lenders that meet their construction needs.” While the pre-development loan program is currently focused on funding small projects at small buildings, Merves says NYCEEC would like to provide funding up to $5 million.

Footing the bill. In its 11-year existence, NYCEEC has financed the greening of more than 11,000 units of affordable housing, including providing $6.9 million in pre-development costs at the former Greenpoint Hospital campus in Brooklyn, where a $213 million zero-net energy project will add 310 units of affordable housing and redevelop a 200-bed homeless shelter. “A lot of co-ops and condos may not be aware that this pre-development money is available to them,” Merves says. Boards can get more information by emailing NYCEEC at greenloans@nyceec.com.