$250-Million Citigroup Loan Aids Floundering Housing Charity

A highly regarded New York affordable-housing nonprofit that nearly went bust after investing heavily in commercial condominiums has received a $250-million lifeline from banking giant Citigroup to refocus on building and rehabilitating apartments for low-income residents, The Wall Street Journal reports.

Community Preservation Corporation will use the capital infusion to construct and renovate up to 6,000 units and has already closed its first deal under the new program, to rehab two buildings in the Bronx.

The corporation, a nonprofit lender and financier founded in 1974 by David Rockefeller, played a key role in revitalizing many New York neighborhoods, building or preserving some 145,000 rental units. But in the 2000s it began investing heavily in the condominium market through a for-profit arm and was left deeply in debt when the housing market crashed.

The Citigroup investment nearly quadruples the corporation’s lending capacity. “It allows us to make a turn from begin focused on workouts [to reduce debt] to providing capital for affordable housing,” said Rafael Cestero, the organization’s chief executive.