NEW YORK, NY – January 28, 2010 – (RealEstateRama) — The board of the State of New York Mortgage Agency (SONYMA) today approved a commitment to insure a $37.5 million mortgage on a 144-unit apartment building in Brooklyn that was originally built to be sold as condominium units.
The commitment by SONYMA’s Mortgage Insurance Fund is aimed at supporting local efforts to convert unsold New York City condominiums into rental housing.
“Our action today is part of a larger effort by our agency to preserve neighborhoods whose stability could be undermined by condominium buildings that have been built but are no longer marketable,” said Judd S. Levy, SONYMA Chairman. “Turning these multifamily projects into rental housing stabilizes communities and provides much-needed housing for middle-class families.”
By issuing mortgage commitments, SONYMA enables lenders to sell their mortgages to New York City’s employee pension funds, generating additional resources for lenders to invest in new housing. SONYMA’s Mortgage Insurance Fund has already issued several commitments to insure mortgages on rental apartment buildings that were initially built to be sold as condominiums.
The insurance commitment approved today is for a mortgage issued by the Community Preservation Corporation for 114-136 Troutman St. in the Bushwick section of Brooklyn. The five-story building was originally built to be sold as condominiums, but because of market conditions has been converted to rental apartments. The developer is Troutman Gardens, whose principals are Mayer Schwartz, Itzchock Schwartz and Cheskel Wider.
Because the project received a 421(a) tax exemption, rents are subject to rent stabilization. Rents will be affordable to households with incomes of $103,680 for a family of four.
Today’s action is part of a larger strategy by SONYMA to help New York City neighborhoods put at risk by the construction of unsold condos. Last year, SONYMA lowered its presale requirement for potential homeowners looking to finance the purchase of condos located in “target” areas. “Target” areas are neighborhoods that are considered economically distressed. Under this new policy, only 40% of the units in a condominium development must now be sold for an individual condo to become eligible for a SONYMA mortgage.
The SONYMA board today also approved seven other mortgage insurance commitments totaling $44.3 million for rental projects that will provide 805 low- and moderate-income housing units. Of the eight projects receiving commitments today, four are located in New York City and one each is located in Rensselaer, Monroe, Saratoga and Dutchess counties.
SONYMA’s Mortgage Insurance Fund is coming off the most successful year in its 32-year history. In 2009, the fund issued $491 million in mortgage commitments–the most it has ever issued in one year. These commitments assisted in the construction or preservation of 7,836 units of affordable housing.
The SONYMA Mortgage Insurance Fund promotes the preservation and revitalization of communities across the State of New York by providing insurance on mortgage loans that encourages investment of capital by commercial and public lenders.
Contact: Philip Lentz
Director of Communications
plentz (at) nyhomes (dot) org