FINANCING (PILOT, LIHTC, SECTION 8, CAPITAL SOURCES, OPERATING BUDGET)

8. What is the plan and status for financing?
The primary proposed financing structure for this project is through the Federal Low‑Income Housing Tax Credit (LIHTC) Program, administered in New York State by New York State Homes and Community Renewal (HCR). A substantial portion of the project’s funding will be provided through equity investment from an affordable housing investor, typically a bank or institutional investor that purchases the tax credits.

The project is also expected to utilize tax‑exempt bond financing, which allows the development to access lower‑cost, long‑term debt while supporting the issuance of 4% LIHTCs. This bond financing will be combined with a traditional first mortgage loan, along with State and Federal soft loans, grants, and other subordinate financing, to fully fund development costs and maintain long‑term affordability.

In addition to LIHTC, the project will pursue New York State Low‑Income Housing Credits (SLIHC), also administered by HCR. SLIHC are typically awarded in coordination with LIHTC and further enhance the equity available to the project by providing additional New York State tax benefits. Together, LIHTC, SLIHC, tax‑exempt bonds, and public financing sources form the core capital structure that makes affordable housing development financially feasible.
HCR has committed to a target financial closing in December 2026, consistent with the anticipated completion of remaining predevelopment activities, including environmental review, final design, and local land use approvals. This timeline reflects the standard sequencing and regulatory requirements of HCR‑financed affordable housing projects.

9. Can you provide a more detailed description of the financing for the project and the proposed tax/PILOT projections?
The project is proposed to be financed using a layered affordable housing financing structure typical of large‑scale, publicly supported affordable housing developments in New York State. The primary components include:

• Federal Low‑Income Housing Tax Credits (LIHTC) administered by New York State Homes and Community Renewal (HCR), which generate private equity through the sale of tax credits to an institutional investor;

• New York State Low‑Income Housing Credits (SLIHC), which are awarded in conjunction with LIHTC and provide additional equity by extending state tax benefits to the investor;

• Tax‑exempt bond financing, which allows the project to access lower‑cost, long‑term debt and supports the use of 4% LIHTCs;

• A first mortgage loan, supported by project operating income;

• State and Federal soft loans, grants, and subordinate financing, which help close remaining funding gaps and ensure long‑term affordability.
   

Together, these sources form a comprehensive financing stack that enables the redevelopment of deeply affordable housing while minimizing required debt and operating pressure.

Importantly, the project’s long‑term tax treatment has been addressed locally. An amended Payment in Lieu of Taxes (PILOT) agreement was approved by the Hudson Common Council at its November 2025 meeting, extending the existing Hudson Housing Authority PILOT structure to the newly constructed replacement buildings proposed under the redevelopment plan. This amended PILOT maintains consistency with the Housing Authority’s current tax framework and ensures predictable, stable payments to the City while supporting the financial feasibility of the affordable housing investment.

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10. If you do not get awarded a particular funding source (ex. ESD Restore funding for demolition), will you still move forward with a redevelopment project?
Yes, the Redevelopment of the Hudson Housing Authority’s existing 135‑unit portfolio is necessary and unavoidable. The existing buildings are obsolete, energetically inefficient, and no longer financially feasible to rehabilitate to modern standards.

The availability of financing is competitive and uncertain by nature. Grants, loans, and equity investments—whether federal, state, or local—are limited, highly competitive, and often layered over time. It is common for projects of this scale to assemble financing from multiple sources across different phases.

With respect to demolition funding specifically, the project would likely seek to pursue Restore NY funding with the City of Hudson as the applicant, timed to follow the delivery of replacement units in Phase 1. This would position the Restore NY request to support the demolition of Bliss Towers and site preparation for Phase 2.

Alternatively, the project team may explore federal earmarks as a supplemental financing source for demolition and site work. As well as continue working with New York State Homes and Community Renewal (HCR) and other state partners to identify opportunities to utilize public housing capital funds or related housing resources to support demolition and redevelopment activities.

11. Will ALL units of the redevelopment be anticipated to be covered by the federal Section 8 Program?
No, not all units will be covered by a federal Section 8 Housing Assistance Payment (HAP) contract. The existing 135‑unit Project Based Voucher (PBV) / RAD contract currently serving residents at Bliss Towers and Columbia Apartments will remain in place across the Hudson Housing Authority (HHA) portfolio.

Under the RAD conversion, all current Bliss and Columbia Apartments residents and all units covered by the RAD contract will be underwritten at up to 50% of Area Median Income (AMI), ensuring the continued preservation of deeply affordable housing and strong resident protections.

Additional units created through the redevelopment that are not part of the existing RAD/Section 8 contract are anticipated to be restricted as affordable housing up to 60% of AMI. These units will not be covered by a Housing Assistance Payment contract such as Project Based Vouchers but will remain permanently affordable through Low‑Income Housing Tax Credit (LIHTC) requirements, regulatory agreements, and recorded affordability restrictions.

For financing and compliance purposes, units underwritten at the 60% AMI level will be maintained and marketed consistent with applicable tax credit and affordability regulations.

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12. You have previously noted that the federal Low-Income Housing Tax Credit Program (LIHTC) may apply. What is the difference between federal Section 8 and LIHTC?
Section 8 and the Low‑Income Housing Tax Credit (LIHTC) Program are two different federal tools used to support affordable housing. They serve complementary but distinct purposes and are often used together in the same development, including in this proposed redevelopment.
 

• Section 8: Focuses on helping households afford rent; provides direct rental assistance; adjusts rent based on household income.

• LIHTC: Focuses on creating and financing affordable housing; relies on private investment; sets income and rent limits at the property level.
   

Section 8 is a direct rental assistance program for households, not a construction incentive, providing rental assistance to low‑income households, seniors, and persons with disabilities.

Assistance can be, Project‑based, where subsidies are tied to specific units, or Tenant‑based, where vouchers are portable and move with the household.

Section 8 ensures that participating households pay no more than 30% of their income toward rent, with the federal government paying the difference directly to the property owner. Section 8 subsidies help ensure long‑term housing stability for residents but do not directly finance construction.

LIHTC is a federal program that provides tax credits to developers to support the construction or rehabilitation of affordable rental housing. Developers sell these tax credits to investors (typically banks or financial institutions) to raise private equity for the project. This equity reduces the amount of debt needed, making it financially feasible to operate housing at affordable rents.

Under LIHTC rules, all units must be income‑restricted; households may earn up to 80% of Area Median Income (AMI), as long as the redevelopment maintains an average income across all units that does not exceed 60% of AMI. Rent limits are tied to income limits, ensuring long‑term affordability through recorded regulatory agreements.

13. What rents will residents be paying at the project once redeveloped?
The rents paid by residents at the redeveloped project will vary depending on whether they receive federal Section 8 assistance. For households with Section 8 Vouchers, rent will be calculated in accordance with federal program rules.

Residents will generally pay approximately 30% of their household income toward rent, taking into account applicable federal deductions, with the balance paid through the Housing Assistance Payment. All current Bliss Towers and Columbia Apartments residents hold Section 8 assistance and therefore will not experience a change in how their rent is calculated as a result of the redevelopment.

For households who newly lease units without Section 8 assistance, rents will be set in compliance with the Low‑Income Housing Tax Credit (LIHTC) Program. Under LIHTC, rents are not based on a household’s actual income but instead are capped based on HUD‑published income limits and maximum allowable rents by household size and county.

Each year, HUD publishes updated LIHTC income and rent limits, and the project will apply the 2026 HUD LIHTC limits in effect at the time of lease‑up. Those limits will establish both maximum household incomes and corresponding rent caps.

The table below provides an illustrative example only, showing how LIHTC rents may appear for Columbia County based on recent HUD guidelines. Actual rents in 2026 will be set using the official HUD‑published 2026 income and rent limits and approved by New York State Homes and Community Renewal (HCR).