In concert with its public and private partners, Citi recently closed a unique financing for 833 Bryant, a project designed to help confront the growing problem of homelessness that is challenging many parts of the country. In this case the result will be 145 new permanent supportive affordable housing units in San Francisco at a lower cost and on a faster delivery schedule than they have been able to be developed in the past.

Citi played multiple roles in the effort: Low Income Housing Tax Credit investor; construction loan administrator; and Letter of Credit provider guaranteeing construction completion. In a departure from a typical 4% affordable housing project financing we also structured and secured a rating for the tax-exempt private activity bonds that were publicly sold in the municipal bond market. The project is also using modular construction, with units being built at Factory OS in Vallejo, California, a new company in which Citi is an investor.

The 833 Bryant site was acquired in 2018 by Homes for the Homeless (HHF), a subsidiary of the San Francisco Housing Accelerator Fund (a public/private entity for which Citi has been the lead lender) that is funded with in partnership with Tipping Point Community using local philanthropic dollars. HHF advanced predevelopment costs to the developer, Mercy Housing, including their initial Factory OS contract deposits.

As owner of the land, HHF is leasing the property to the Mercy/Citi development partnership. The partnership will lease the completed project to the City, who will sublease it back to the partnership under a 30-year lease and sub-lease arrangement. City of San Francisco lease payments will pay for debt service on the bonds, which, by virtue of San Francisco’s Triple-A G.O. rating, have been rated Aa2 by Moody’s Investor Service. The net interest cost on the 30-year bonds

is 2.91%. The City of San Francisco is also funding all operating and supportive services costs for the project.

Building a single affordable housing unit in San Francisco can cost $750,000 and take three years or more to build and lease. As a result of the efficiencies gained by the partnership between San Francisco, the Accelerator Fund, the philanthropic organizations that it has assembled, Mercy and Citi, the cost of this project will be about $440,000 per unit and it is expected to be ready for occupancy in October 2021, just 14 months from bond closing.

Citi Community Capital

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