It’s getting harder to find financing for rent-stabilized buildings in New York.
The City Reporter reported earlier this week that Freddie Mac is pausing loans to rent-stabilized properties while Fannie Mae is tightening its underwriting requirements for these properties in light of the rent freeze.
Bill Pulte, who heads the Federal Housing Administration, however disputed the reporting.
A spokesperson for Freddie Mac, reached by The Real Deal, denied there was any pause and said that the organization is continuing to quote and lend on rent-stabilized properties.
A spokesperson for Fannie Mae, which was not reported to be pausing loans, said it continues to be an “active source of financing” for multifamily property in New York, including rent-stabilized properties.
The situation has put Pulte and the Mamdani administration on the same side, as both try to dispel talk of a pullback. The Mamdani administration hasn’t directly denied the reporting, but in court the city’s law department pointed to Pulte’s statements in an effort to have the court disregard claims about the article.
Jon Estreich, who arranges loans for multifamily buildings, said Fannie and Freddie are still lending, but they are underwriting their loans judiciously. And with a rent freeze locked in for at least two years, that means different requirements.
“It’s not so much Fannie, Freddie, agencies — it’s everybody,” Estreich said. There are still firms making loans to rent-stabilized properties, but they are few and far between, he said.
Scott Mollen, a real estate attorney with Herrick, similarly said Fannie and Freddie’s tightening underscores the overall difficulty of getting financing in the sector.
“The way public lenders underwrite loans is very similar to the way the private market underwrites loans,” Mollen said. “That means private lenders are reacting the same way.”
What does that mean for the market? More foreclosures are likely, as borrowers struggle to refinance, with some likely to just give over the keys.
What we’re thinking about: Have you refinanced a rent-stabilized property recently? Tell me about it at lilah.burke@therealdeal.com.
A thing we’ve learned: Attendees of the Somos political conference in Puerto Rico can enjoy the beautiful views of the Caribe Hilton but can’t go by the pool, as security told Rep. Nydia Velázquez, Jeff Coltin of City & State noted on X.
Elsewhere . . .
—- The Assembly Democrats’ annual spending on sports has jumped to nearly $90,000 since Carl Heastie became speaker, from less than $5,000 before, New York Focus reports. Delaware North has donated $37,000 in suite packages at its TD Garden in Boston for the Democratic Assembly Campaign Committee, which Heastie, a Boston Celtics fan, leads. Heastie fired back over Instagram, saying, “It’s called fundraising stupid … Sports games are great ways to fundraise.”
—Three defendants were charged for a scheme to divert $1 million from the city’s One Shot Deal program, which gives financial assistance to New Yorkers facing eviction, the Department of Investigation announced. The defendants allegedly submitted 170 fraudulent applications to the program.
— Rent increases in rent-controlled apartments in Elizabeth, New Jersey, will be capped at just $20, Gothamist reports, after voters in the city approved the measure.
Closing time
Residential: The most expensive residential real estate deal recorded Thursday was $7 million for a 2,114-square-foot condominium at Central Park Tower, 217 West 57th Street. Lynne Mazin and Elena Ash with Compass had the listing. The unit last sold for $6.1 million in August 2021.
Commercial: The highest price for a commercial sale was $20 million for a 20,037-square-foot development site at 33-10 Astoria Boulevard.
New to the Market: The highest price for a residential property hitting the market is $26 million for a 12,467-square-foot house at 106 East 71st Street in Lenox Hill. The Field Team with Sotheby’s has the listing. The townhouse last sold for $22.9 million in 2013.
Breaking Ground: The largest new building permit filed was for a proposed 89,968-square-foot, 80-unit mixed-use project at 1288 Fulton Street in Bedford-Stuyvesant. Amr Ouda of Jay Architect & Engineering filed the permit on behalf of Chaskel Landau.
— Matthew Elo
