The U.S. Housing and Urban Development (HUD) has announced a $621 million deal to refinance a previous mortgage at Co-op City, a large cooperative housing community that is home to more than 57,000 residents in the Bronx, N.Y.
HUD and Wells Fargo Bank closed on the loan that will preserve long-term affordable housing for these families and significantly lower annual interest payments for the building's owner over the next 35 years. The new mortgage is backed by the Federal Housing Administration's (FHA) General Insurance and Special Risk Insurance Fund. By guaranteeing the mortgage, FHA's Section 223(f) Program allows this 35-year loan to be financed with Ginnie Mae mortgage-backed securities.
The State of New York Mortgage Agency will provide mortgage insurance and New York City Housing Development Corp. will provide a guaranty for the first $70 million or 11.25% of the loan ($55 million and $15 million coverage of the loan, respectively). This risk-sharing arrangement reduces FHA's risk and makes mortgage financing even more affordable for the cooperative's owner.
‘This is about preserving affordable housing for the next generation of families living and working in one of the nation's highest-cost rental markets,’ says HUD Secretary Shaun Donovan. ‘Working closely with the State of New York and New York City, we're making certain that working families have a decent and affordable place to call home, while saving private owners of affordable housing significant money that they can reinvest back into their properties.’
Originally a swamp along the west bank of New York's Hutchinson River, the 330-acre site of Co-Op City was originally the location for the short-lived Freedomland amusement park. Today, the site is home to 15,372 units in 35 residential structures, three shopping centers, a 25-acre educational park, eight parking garages, three elementary schools, two middle schools, a high school, a weather station, 14 gymnasiums, two swimming pools, 15 churches, six nursery schools and day care centers, four basketball courts, five baseball diamonds, numerous restaurants, a power plant and a multiplex movie theater.Â
Photo credit: Quibik