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July 31, 2014

Big Banks Pony Up for $350-Million NYC Housing Fund

New York Mayor Bill de Blasio announced on Wednesday a $350-million loan fund for affordable-housing projects to be financed largely by Wall Street banks, Bloomberg and The Wall Street Journal write.

Citigroup will make $75-million available at 2.75 percent interest for the housing pot, with Wells Fargo and Morgan Stanley investing $50-million each. Eleven other banks as well the city's public pension funds and its Housing Development Corporation have made commitments to the fund.

The deal marks a major boost for Mr. de Blasio's 10-year plan to significantly expand the city's affordable-house stock and signals improved relations between Wall Street and the Democratic mayor, whose campaign last year focused on income inequality and included calls for higher taxes on the rich. The new fund will be administered the Community Preservation Corporation, a nonprofit lender that received a $250-million infusion from Citigroup last year.