Citizens Bank in Rhode Island announces $17.75 million loan for affordable housing
Neighborworks Blackstone River Valley receives “Citizens Housing Bank” loanProvidence, R.I. (November 26, 2007) - Citizens Bank announced today a $17.75 million loan through the Citizens Housing Bank to Neighborworks Blackstone River Valley (NBRV) to build 80 new rental units of affordable senior housing in town. This loan is a part of the bank’s $200 million Housing Bank loan fund to nonprofit housing developers in New England. Joseph J. MarcAurele, President, Citizens Bank, Rhode Island, was joined by local, state and federal officials at the announcement.
“I am pleased to announce Neighborworks Blackstone River Valley as a recipient of loan funds from the Citizens Housing Bank. The lack of affordable rental housing in our state has prompted many to leave our region for more affordable areas,” said MarcAurele. “Through this program, Citizens provides low-cost funding to non-profit developers like NBRV to create affordable housing to keep Rhode Islanders in the state.”
The Meadows project will provide 80 new affordable apartments, which will house approximately 90 low income seniors in North Smithfield. Several units will be handicapped accessible, with the remaining incorporating universal design features allowing them to be handicapped adaptable. In addition, many amenities and conveniences will be provided to residents including a large community/function room, a physical therapy/wellness room, and offices for health and social service providers.
The goal of the project is to develop affordable housing that: meets the needs identified in the Town of North Smithfield’s Affordable Housing Plan; to provide an affordable housing design that will allow seniors to “age in place;” to incorporate Energy Star features in the construction to reduce long-term operating costs; and to promote quality design and Smart Growth principles in the development of affordable housing.
“The Citizens Housing Bank has allowed us to continue our development and has filled a significant financial gap with its below market loan product. The Citizens Housing Bank loan greatly enhances the financial feasibility of the project. It would not have happened without this innovative project,” said Joseph Garlick, Executive Director of NBRV. “Citizens Bank has truly taken the lead in promoting real solutions to Rhode Island’s affordable housing crisis through the continuation of the Citizens Housing Bank.”
The Citizens Housing Bank was launched in April 2004 to address the region’s affordable housing crisis. The program provides a $200 million loan program with funds available at a very low interest rate to non-profit developers in Rhode Island, Massachusetts, New Hampshire and Connecticut. The program has succeeded its original goal of creating and/or preserving at least 1,200 new housing units in these states, 450 units here in Rhode Island. The program also benefits the state’s economy by increasing overall housing production and increasing the number of apartments and homes for the state’s growing workforce.
The Citizens Housing Bank provides a below market interest rate for short-term construction loans and at the same time, locks in permanent financing. Under the program, new community development loans will be offered to non-profit developers at the fixed interest rate of 5% for three years with a 25-year amortization. For the remainder of the term, the loan rate will be fixed at prime with a 7% cap.
Rhode Island Housing provided the allocation of Low Income Housing Tax Credits (LIHTC), as well as other funding through the HOME program. The LIHTC provide equity for the project, essentially in a grant, which allows the rent levels to remain affordable for elderly residents.
NBRV also received $400,000 in funding from the Rhode Island Housing Resources Commission's Neighborhood Opportunities Program for the Meadows development project. The commission is the state agency responsible for housing policing and planning. In addition the project received $1.6 million in state bond funds.
“Affordable housing is crucial to the health of our communities and our economy. It creates jobs, revitalizes neighborhoods and ensures the people who live there will thrive,” said Susan Baxter, Chairwoman of the Rhode Island Housing Resources Commission.
Local Inintiatives Support Corporation (LISC) is a major investor in the Meadows project and the work of NBRV. Through LISC's National Equity Fund, LISC brokered a $6.2 million Low Income Housing Tax Credit investment. LISC also provided a critical zero-interest loan at the project's inception to support environmental, engineering and architectural work. Finally, LISC provides operating support grants for NBRV through its Neighborhood Development Fund.
“LISC is extremely proud to be a partner with NBRV and Citizens Bank in supporting this development,” said Barbara Fields, Executive Director of RI LISC. “When completed, The Meadows will provide beautiful homes for 80 elderly residents and contribute to the well-being of this community. This is just another outstanding example of what can happen when we couple serious investment capital with the energy and determination of organizations like NBRV.”
The Federal Home Loan Bank of Boston, through the Affordable Housing Program, provided nearly $600 thousand in additional resources to write down the interest rate on the permanent Citizens Bank mortgage of $17.75 million to a very low 2.98%.
About Citizens Bank
Citizens Bank is a division of RBS Citizens, N.A., operating its seven-state branch network in Connecticut, Delaware, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. It has 78 branches and 145 ATMs in Rhode Island.
RBS Citizens, N.A. is a subsidiary of Citizens Financial Group, Inc., a $159 billion commercial bank holding company headquartered in Providence, R.I. CFG’s two bank subsidiaries are RBS Citizens, N.A. and Citizens Bank of Pennsylvania. They operate a 13-state branch network under the Citizens Bank brand in Connecticut, Delaware, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island and Vermont, and the Charter One brand in Illinois, Indiana, Michigan and Ohio. CFG has non-branch retail and commercial offices in about 40 states. It is one of the 10 largest commercial banking companies in the United States ranked by assets and deposits. CFG is owned by RBS (The Royal Bank of Scotland Group plc).
|