By Dees Stribling, Contributing Editor
New York—Greystone Funding Corp., a multifamily and commercial property mortgage specialist, has originated $72.7 million in financing for two multifamily housing projects in New York City. HUD provided the financing for the properties.
The first property, a 224-unit building, received about $40 million of loan proceeds, including a cash-out to the owner. The second, a 152-unit building, generated $32.7 million, also with cash-out to the sponsor.
According to Greystone managing director Mordecai Rosenberg, HUD financing currently represents a “once-in-a-lifetime opportunity” to lock in 35-year, self-amortizing financing at rates below 3 percent. Not only that, he says that HUD financing often represents a high level of loan proceeds, and also a way to deal with a rising interest rate environment.
Rosenberg adds that HUD financing is increasing popular even in New York City, where owners have long relied on 5- to 10-year bank financing. Rosenberg, along with Greystone’s Donny Rosenberg and Traverse Fournier, led the effort to close the transactions.
Under HUD rules, Section 207/223(f) insures mortgage loans to facilitate the purchase or refinancing of existing multifamily rental housing. These projects may have been financed originally with conventional or FHA insured mortgages. Section 223(f) insures lenders against loss on mortgage defaults, allowing for long-term mortgages (up to 35 years) that can be financed with Government National Mortgage Association (GNMA) MBS.