Long Island will get 252 new or rehabilitated affordable rental apartments as part of multibillion-dollar legal settlements with major mortgage lenders, the state's top prosecutor is expected to announce Wednesday.
Bank of America and Citigroup will provide low- or no-interest loans to fund more than 3,700 rentals statewide in deals arising from settlements with the banks last year regarding the sale of mortgage-backed securities. Attorney General Eric T. Schneiderman is due to announce the loans at a news conference in Brooklyn Wednesday.
"New Yorkers were hurt in many ways by the housing crisis," Schneiderman said in planned remarks. "These affordable homes will help thousands of New Yorkers finally get past the housing crisis."
The plan to be unveiled Wednesday calls for Bank of America to provide a $2.2 million loan for the construction or rehabilitation of 110 apartments in Middle Island. Citigroup will lend $1.8 million for 90 rentals in Copiague, as well as $520,000 for 52 apartments in Manhasset.
The rentals will be set aside for low- and moderate-income residents. It was not clear Tuesday when the apartments were expected to be ready or how eligibility would be determined.
Less than 20 percent of Long Island's housing supply consists of rentals, roughly half the share in northern New Jersey and Westchester, housing experts say.
Long Island's current supply of affordable rental apartments "is dramatically insufficient to meet the need, whether for young professionals, families or empty nesters," said Marianne Garvin, chief executive of the Community Development Corp. of Long Island in Centereach.
In August, Bank of America agreed to a $16.65 billion settlement, the largest accord in U.S. history with a single institution.
The previous month, Citigroup agreed to a $7 billion settlement.
Both agreements concerned the banks' "serious misrepresentations to the public" regarding the marketing and sales of residential mortgage-backed securities, the attorney general's office said in news releases last year. Schneiderman co-chaired the federal and state working group that struck the accords with the lenders.
In addition to financing affordable rentals in high-cost areas, the two settlements also required the lenders to take steps such as providing relief to distressed homeowners and donating abandoned "zombie" homes to land banks, municipalities and not-for-profit groups.