Housing Development Fund Corporation

Housing Development Fund Corporation or HDFC is a special type of limited equity housing cooperative in New York City [1] which is incorporated under Article XI of the New York State Private Housing Finance Law (PHFL) and the Business Corporation Law (BCL).[2] Under this law, the city of New York is able to sell buildings directly to tenant or community groups to provide low-income housing. Many HDFCs were created through a process of co-op conversion of a foreclosed, city-owned property. As of 2008, over 1,000 HDFC cooperatives have been developed in the city.[1] In many cases HDFC cooperatives have certificates of incorporation that require tenant occupancy which article XI states must be operated for the benefit of resident shareholders.[3] HDFC units were created to provide affordable housing to people living with low to middle income. HDFC units are usually below market value with mortgages less than the current rent on similar units and have relatively low maintenance fees.[4] To qualify for HDFC units one must possess some liquidity because HDFC cooperatives are cash strapped and tend to look for buyers with large amount of cash for down payments or cash only sale. This can disqualify many people with low income that cannot afford to make the down payment required by the HDFC co-ops. Having just an income is not enough to qualify HDFC units, one must also have an asset which undermines the main purpose of HDFC since the poor often lack the cash or asset.[5]