Bank Financing
Agency Financing
NEW YORK (Nov. 5, 2026)—Leading financial services provider Merchants Capital today announced $185 million in financing for the acquisition and rehabilitation of Nostrand Houses, a 1,148-unit multifamily property located in the Sheepshead Bay neighborhood of Brooklyn, N.Y. It is the first financial closing for the New York City Public Housing Preservation Trust (the Trust), developer of Nostrand Houses.
Merchants Capital structured a $185 million taxable loan provided by Merchants Bank for Nostrand Houses; $50 million of the total loan was provided by the AFL-CIO Housing Investment Trust (HIT), who acted as co-lender for the transaction.
“With Merchants’ highly collaborative approach, our team was able to provide critical financing for Nostrand Houses in partnership with AFL-CIO HIT,” said Joshua Canan, Senior Vice President of Originations at Merchants Capital. “Merchants Capital is honored to serve as financing partner in support of the Trust, and we look forward to future partnerships that advance affordable housing and strengthen communities.”
“With Merchants’ highly collaborative approach, our team was able to provide critical financing for Nostrand Houses in partnership with AFL-CIO HIT. Merchants Capital is honored to serve as financing partner in support of the Trust, and we look forward to future partnerships that advance affordable housing and strengthen communities.”
“We feel a deep debt of gratitude to be counted among dedicated partners who are transforming the state of housing in New York City,” said Mathew Wambua, Vicechair and Executive Vice President of Agency Lending at Merchants Capital. “This closing marks a new model of collaboration through the Trust, inclusive of residents and public and private organizations, and a monumental achievement in fortifying affordable housing development locally.”
“Our investment in Nostrand Houses reflects HIT’s strong commitment to New York City,” said Chang Suh, CEO of the AFL-CIO Housing Investment Trust. “Through our collaboration with the New York City Public Housing Preservation Trust, New York City Housing Development Corporation and Merchants Capital, we are helping to preserve and modernize NYCHA housing while delivering sound investments for our pension fund investors and creating good union jobs.”
“We feel a deep debt of gratitude to be counted among dedicated partners who are transforming the state of housing in New York City. This closing marks a new model of collaboration through the Trust, inclusive of residents and public and private organizations, and a monumental achievement in fortifying affordable housing development locally.”
Nostrand Houses is the first development to participate in the Trust’s Modernization & Preservation (Trust Mod) Program which, in partnership with the New York City Housing Authority (NYCHA), enables the repair, rehabilitation and modernization of traditional Section 9 housing by converting units into the federal Section 8 program. As the largest public housing authority in North America, NYCHA owns 177,565 apartments in 2,410 buildings across 335 conventional public housing and Permanent Affordability Commitment Together (PACT) developments. This project marks the first of more than 25,000 units that are expected to receive capital improvements via the Trust Mod Program.
Affordability for the units will be maintained through a conversion under the Rental Assistance Demonstration (RAD) program and the U.S. Department of Housing and Urban Development (HUD) Section 18 process. The Kings Bay Y, selected in coordination with residents, will provide social services, including individualized case management, resource navigation services, housing stability support and crisis intervention. Programs will also be available to support physical and mental health, youth development, family support services, senior programming and workforce development.
“The Trust’s first financial closing marks a new chapter for public housing in New York City,” said Vlada Kenniff, President of the New York City Public Housing Preservation Trust. “Together with our residents and partners, we are demonstrating how innovative financing and strong partnerships can deliver long-overdue improvements while keeping public housing public. We thank Merchants Capital for helping us turn this vision into reality.”
“We deeply appreciate the creativity and collaboration of the entire Merchants team as we worked toward the Trust’s first closing,” said Elizabeth Propp, Managing Director, Project Finance and Development at the New York City Public Housing Preservation Trust. “The dedication and commitment of Merchants, AFL-CIO Housing Investment Trust, and all of our deal partners will result in direct and meaningful change for the 2,000+ residents of Nostrand Houses.”
Nostrand Houses comprises 16 residential buildings, constructed between 1949 and 1951, across two contiguous sites. Its rehabilitation will occur in six phases for individual apartments and building-wide systems, with new kitchens and bathrooms to be installed in addition to new, electrified heating and cooling systems, new elevators, improved accessibility, lead and mold remediation, upgraded security systems and other critical improvements.
Upon completion, current Nostrand Houses residents will return to their fully renovated apartments and modernized buildings. Any vacant one-, two-, and three-bedroom apartments will be available to eligible households through the Project-Based Section 8 program. NYCHA will continue to manage the development, with more than 40 on-site staff members, and new property management and maintenance office to support operations.
Construction started in October 2026 and is expected to be completed in 60 months.
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