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Directory of New York City Affordable Housing Programs

Program (?) Mitchell-Lama
Alternative Name(s) State Mitchell-Lama; City Mitchell-Lama; Article IV Limited Dividend Company; Article V Limited Dividend Company
Related Programs Mitchell-Lama Rehabilitation and Preservation Program
Mitchell-Lama Mortgage Restructuring Program
Mitchell-Lama Repair Loan Program
Benefit Classification (?)  
Supply or Demand Supply
One-Time or Ongoing Ongoing
Benefit Type (?) Financing, Tax Relief
Government Agency (?) NYS Department of Homes and Community Renewal,
Program Information (?)  
Scale Very Large Scale (over 10,000 units produced)
Timeframe 1955-Present
Developer/Owners (?) For-Profit, Non-Profit
Property Information (?)  
Property Occupancy Occupied
Property Type Building
Building Type Multi-family
Construction Type Rehabilitation, New Construction
Occupant Tenure (?) Rental, Homeownership
Occupant Income Restrictions (?) Moderate-Income
More Information NYS HCR

The Mitchell-Lama program subsidized the construction of 269 developments, with over 105,000 apartments for moderate- and middle-income households. Prior to Mitchell-Lama, a precursor under the Article IV of the New York State Limited Dividend Company Act authorized in 1927 subsidized 22 owner-occupied middle-income developments with an additional 10,000 apartments. In exchange for low-interest mortgage loans and real property tax exemptions, the Mitchell-Lama program limited profits and placed income limits on tenants or cooperative owners. The program also required ongoing supervision by the agency originally sponsoring the development of the project, either HPD or HCR. After New York City’s fiscal crisis, HDC, beginning in 1977, working with FHA, refinanced many of the City’s Mitchell-Lama portfolio; by 1980, HDC had refinanced projects containing 29,000 units and thereby reduced New York City’s debt burden.

Developments are eligible to withdraw or buy out from the program after 20 years, upon prepayment of the mortgage, or after 35 years in the case of developments aided by loans prior to May 1, 1959. Owners may choose to buy out of the Mitchell-Lama program by prepaying the existing mortgage in order to have the ability to re-sell their projects at market rates. When owners buy out, their buildings are no longer subject to HCR or HPD Mitchell-Lama regulation, and apartments need not be kept affordable for moderate-income households (rent regulation for rental projects built before 1974 remains in effect, as do the regulatory requirements of tax relief or other programs). State agencies, including the Housing Finance Agency, Empire State Development Corporation, and HCR, have collaborated to identify State Mitchell-Lama housing companies to participate in mortgage re-financings, which generate funds for capital improvements and property upgrades.

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