The New York City Housing Development Corp. board on Monday approved a $680 million inaugural sustainable neighborhood bond transaction, which the agency expects to price next week.

It's the first social bond for affordable housing in the U.S., according to HDC President Gary Rodney. "It's yet another first for the corporation," Rodney said at the board meeting in lower Manhattan before a packed conference room.

The agency planned to issue a preliminary official statement later Monday. It will issue the bonds in a variety of series through several co-managers.

The transaction falls under the agency's multifamily housing revenue bonds program to finance socially beneficial projects, specifically the new construction and preservation of affordable housing projects.

Standard & Poor's last September raised its long-term and underlying ratings on the corporation's multifamily housing bond resolution — known as the open resolution — to AA-plus from AA. Moody's Investors Service assigns its Aa2 rating.

The open resolution is HDC's largest single asset and most flexible financing vehicle, established in 1993 to permit the issuance of unlimited parity debt bonds.

HDC, the nation's largest local housing finance agency and the leading issuer of revenue bonds for affordable multifamily housing, is collaborating with the New York City Department of Housing Preservation and Development to implement Housing NY, Mayor Bill de Blasio's 10-year plan to create and preserve 200,000 affordable units for low- and middle-income persons citywide.

"Housing is a catalyst for jobs, retail, transit, parks, schools and all the services that neighborhoods need to thrive," said Vicki Been, HDC chair and commission of the city's Housing Preservation & Development agency.

The housing developments in question will receive financing through a variety of subsidy programs. Certain developments financed with these bonds will also receive allocations of federal low-income housing tax credits, which may generate additional financing sources for construction or rehabilitation.

"This program will bring environmental benefits, commercial amenities and social services and in some cases, all of the above," said Rodney.

The majority of projects that receive funding from HDC must comply with Enterprise Green Communities Criteria, the only comprehensive green building framework designed for affordable housing and administered through Enterprise Community Partners Inc.

Since 2003, HDC has financed more than 120,000 units with more than $13.7 billion in bonds and provided more than $1.6 billion in subsidy from corporate reserves.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry