Fiscal board approves financing for affordable housing in San Lorenzo

By The Star Staff

The Financial Oversight and Management Board has given its approval for a comprehensive financial arrangement designed to support the development of an affordable housing initiative in San Lorenzo.

The decision is articulated in a letter sent to the Fiscal Agency and Financial Advisory Authority (AAFAF by its initials in Spanish), outlining the specifics of the proposed deal.

In its correspondence, the oversight board expressed gratitude for the detailed submission and the accompanying information provided by AAFAF. The primary objective of the financial arrangement is to secure financing for the construction of affordable rental homes, which is increasingly critical in addressing housing shortages within the region.

The financial proposal entails the Puerto Rico Housing Finance Authority (HFA) engaging in a loan agreement with Banco Popular de Puerto Rico, which will provide up to $105 million. Those funds are earmarked for the development of an ambitious affordable housing project, officially named Hacienda San Miguel, which is set to feature 350 single-family homes in San Lorenzo. Additionally, the financial resources will cover associated costs linked to the deal, ensuring the project can be executed without fiscal hindrance.

A noteworthy element of the financial structure is that it is designed to eliminate repayment obligations for the HFA, the Puerto Rican government, or any of its affiliated agencies. Instead, the repayment of the funds will rely on federal resources, specifically allocated disaster relief funds and low-income housing tax credits. The innovative financing mechanism ensures that the financial return is not contingent on the income generated from the housing project itself. It is anticipated that repayment will be finalized by the conclusion of the construction phase, as detailed in the communication to the AAFAF.

The proposed project marks the 17th affordable housing initiative that the oversight board has evaluated and approved, underscoring, the board said, its commitment to enhancing the availability of affordable housing options in Puerto Rico and alleviating the pressing housing challenges faced by many residents.