JPMorgan Chase announced initiatives to expand the preservation of affordable housing and rental housing options across the U.S., as part of the firm’s recently announced $30 billion commitment to advance racial equity. To help maintain affordability for tenants, the Commercial Term Lending group is offering multifamily owners and operators with an industry-leading Affordable Housing Preservation Program, providing an economic incentive, as well as extending rent and income-restricted subsidy mortgage lending programs to this client base.
The lack of affordable housing options disproportionally affects communities of color and low-income renters. According to a report from the Joint Center for Housing Studies of Harvard University, more than half of Black and Latinx renter households were moderately or severely cost-burdened in 2019. The COVID-19 pandemic and its economic impact have widened these disparities further. According to the National Low Income Housing Coalition, extremely low-income renters, defined as households with incomes at or below poverty guidelines or 30 percent of area median income, face a shortage of 7 million affordable and available rental homes in the U.S., which has remained essentially unchanged over the last five years.
This compliments the affordable housing work the firm already does through Community Development Banking, working with industry stakeholders to create and preserve affordable housing options for low- and moderate-income households. As the no. 1 multifamily lender in the U.S., JPMorgan Chase’s Commercial Term Lending group is now offering multifamily clients:
- The Affordable Housing Preservation Program:
The industry-leading Affordable Housing Preservation Program will leverage JPMorgan Chase’s experience and leadership in the workforce housing space, offering multifamily clients with economic incentives to keep the rental units in their buildings at an affordable level. Eligible multifamily clients will receive a reduction on their interest rate that will last the life of the loan. This program is targeted to help renters making below an area’s median income and most vulnerable to the growing affordability crisis.
- Expansion into Rent and Income Restricted Housing:
Federal programs that provide project-based rental assistance and other subsidies, such as Low-Income Housing Tax Credits, are important housing tools that provide low-income families decent and safe housing options. The Community Development Banking group has been providing construction and term financing of new affordable restricted rent projects for decades and has expanded the platform in recent years. The refinance of these types of properties has historically been supported by secondary markets financing. Now, the firm’s Commercial Term Lending group will offer low-cost financing solutions to multifamily housing owners and operators of restricted rent properties.
In October 2020, JPMorgan Chase announced a five-year $30 billion commitment to advance racial equity. This commitment is helping to break down the racial wealth divide, promoting and expanding affordable housing, growing Black and Latinx-owned businesses, improving financial health and access to banking and accelerating investment in the firm’s employees. Over the next five years, JPMorgan Chase will finance an additional 100,000 affordable rental units, providing $14 billion in new loans, equity investments and other efforts to expand affordable housing in underserved communities.