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04.02.14

New York City Revises Procedures for Real Estate Related Nonprofits

BY Meghan Altidor

 

The New York City Department of Housing Preservation and Development (“HPD”) issued a new Certificate of Incorporation requirement at the end of last year affecting Housing Development Fund Corporations seeking HPD consent to formation.  The new Certificate of Incorporation includes statutorily required provisions as well as new provisions that may be of interest to owners of affordable housing.  In particular, the new Certificate includes a requirement that all sale proceeds be deposited with HPD or devoted to a low-income housing project as approved by HPD.  Project managers at HPD will review formation requests in conjunction with the disclosure process. 

 

A Housing Development Fund Corporation (“HDFC”) is a not-for-profit corporation formed under Article XI of the New York State Private Housing Finance Law exclusively for the purpose of developing and operating low-income housing.  Subject to the approval of the local legislative body, HDFCs may receive a partial or complete exemption from real estate taxes for up to 40 years.