December 4, 2012
Around Town By Neal Tepel
State’s Largest Mitchell-Lama Development, Home to 55,000 Residents, Will Remain Affordable for 35 More Years Governor Andrew M. Cuomo, Mayor Michael R. Bloomberg have announced the closing of a $621.5 million loan to the Co-op City development in the Bronx.
The Federal, state and city governments have joined together to jointly insure the mortgage loan made by Wells Fargo Bank, which will refinance Co-op City’s existing debt at historically low interest rates. Under the terms of the loan, Co-op City, the largest Mitchell-Lama co-op that first opened to the public in 1968, will remain affordable to residents for 35 more years.
“Keeping Co-op City affordable and viable is great news not just for current tenants but for thousands of Bronx residents who need affordable housing options,” said Mayor Michael R. Bloomberg. “We have a long-standing commitment to preserving affordable housing for this generation and for the generations to come – that’s why we’ve set an ambitious goal to finance the creation and preservation of 165,000 affordable housing units by the end of 2014 under the New Housing Marketplace Plan. Thanks to Governor Cuomo and HUD Secretary Donovan for their partnership on this important project.”
The Wells Fargo loan to Riverbay Corporation, which controls Co-op City, is the largest ever insured under HUD’s 223(f) program, which protects lenders against loss on mortgage defaults at multi-family rental properties. It is also the first time the program has been applied to a co-operative development. The Mortgage Insurance Fund of the State of New York Mortgage Agency (MIF/SONYMA, within New York State Homes and Community Renewal, or HCR) and New York City’s Housing Development Corporation (HDC) will be providing credit support with $55 million and $15 million coverage of the loan, respectively.
New York State’s Mitchell-Lama Housing Program was first proposed by State Senator MacNeil Mitchell and Assemblyman Alfred Lama and was signed into law in 1955 by Governor William Averell Harriman. Under the state’s Private Housing Finance Law, the program provided for the creation of affordable housing, both rental and co-operatively owned, for middle-income residents. Developers received tax abatements and low-interest mortgages, subsidized by the federal, state, or New York City government. In total, 269 housing developments with 105,000 units were developed with State aid under the Mitchell-Lama Program.