Fannie Mae is encouraging banks to resume lending in Battery Park City. (flickr/ Victoria Belanger)By Julie Shapiro
DNAinfo Reporter/Producer
BATTERY PARK CITY — The Fannie Mae freeze in Battery Park City is over.
The government-backed mortgage giant Fannie Mae all but stopped buying mortgages in the neighborhood several months ago, because the firm wanted to review the complicated ground leases unique to Battery Park City. That made it almost impossible for residents to sell their condos.
But now Fannie Mae has finished its review and decided that the leases won't stop the lender from investing in any of the neighborhood's condo buildings, said Jim Cavanaugh, president of the Battery Park City Authority.
“The Fannie Mae issue is fully resolved and should not be a reason for any mortgages to be denied,” Cavanaugh told DNAinfo Friday.
Fannie Mae will send letters to 27 banks that write mortgages in Battery Park City to give them the green light on lending in the neighborhood, Cavanaugh said. Banks often count on Fannie Mae to buy their mortgages and were holding off on giving out loans in BPC based on Fannie’s concerns.
Janis Smith, Fannie Mae spokeswoman, confirmed that Fannie Mae would send a letter to banks.
“The ground leases on the established condominium projects have been reviewed and are acceptable,” she said in an e-mail.
Terry Lautin, a broker with Prudential Douglas Elliman who focuses on Battery Park City, was thrilled to hear Fannie Mae had warmed to the neighborhood.
“That’s excellent news,” Lautin said. “People will be able to buy and sell property again.”
One good thing to come out of the freeze is that more people have heard of Battery Park City and may look to buy there now, Lautin said.
Eric Wallace, a neighborhood condo owner, was also glad the loan issue was resolved.
But Wallace said he is still concerned about the high taxes Battery Park City residents pay. In addition to property taxes, BPC residents pay ground rent on the land beneath their condos.
The complexity of these ground rent arrangements is precisely what Fannie Mae was concerned about.
Fannie Mae previously denied there was a problem with Battery Park City loans. A spokeswoman said earlier this year that Fannie had over $100 million invested in the neighborhood and had purchased more than 30 loans there since last fall, but many brokers and sellers say they have not been able to get loans approved.
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