The Vacant Building Program allowed the city to transfer the title of vacant city-owned buildings in clusters to private developers using a competitive process. Developers then received construction financing and permanent loan commitments, primarily from New York City Community Preservation Corporation (CPC), a non-profit lender funded by a consortium of commercial and savings banks. CPC also provided fixed-rate, 30-year mortgages for the properties. The city provided up to two-thirds of the rehabilitation cost at one percent interest, and this loan became a second mortgage on the property, thus making rents more affordable for tenants. Rents were set in consultation with the City’s Housing Preservation and Development (HPD) to be affordable to low- and moderate-income households.
HPD also used the expertise of the Local Initiative Support Corporation (LISC) and the Enterprise Foundation (today known as Enterprise Community Partner) and their network of community development corporations (CDCs) to provide Low Income Housing Tax Credit (LIHTC) financing in combination with city low-interest loans and grants. They also provided management and technical assistance training to smaller non-profit CDCs so that they could participate in the program. New York City sold vacant properties to non-profit housing organizations for $1. In addition, projects were subject to a 30-year regulatory agreement which governed the use and affordability of these units. After the sale, LISC and Enterprise syndicated tax credits in order to raise equity for the projects which were targeted to households earning below 60 percent of Area Median Income (AMI).