A new initiative, the New York City Minority Business Enterprise (MBE) Guaranty Facility, will provide up to $50 million to help MBE developers overcome historical financial barriers and fully participate in the development of critically needed affordable housing for New Yorkers. This new investment is expected to enable as much as $500 million in private construction lending to MBEs. The initiative was announced this month in partnership with Goldman Sachs, Community Preservation Corporation (CPC), New York City Mayor Eric Adams, New York City Housing Preservation Development (HPD), and New York City Housing Development Corporation (HDC).
MBEs have historically faced challenges securing construction loans due to restrictive financial barriers, including lender guaranty and liquidity requirements, often resulting in the need to form a partnership with larger firms that dilutes their ownership and reduces their developer fees, or entirely prevents them from participating in affordable housing developments. The MBE Guaranty Facility removes those barriers by providing a total of up to $50 million in back-stop guaranties, allowing MBE developers to independently access the capital required to secure construction financing and develop city-financed affordable housing projects in New York City.
The MBE Guaranty Facility includes a $25 million commitment from HDC on behalf of the City and a $25 million commitment from Goldman Sachs Asset Management over a five-year period, with CPC serving as the facility manager.
Source: goldmansachs.com