Chelsea mortgage 110 percent of sale price

By Adam Pincus | November 13, 2008 02:00PM

Despite a cooling Manhattan condominium market in which banks have tightened lending requirements, the mortgage for a three-bedroom penthouse apartment in the new Chelsea Stratus was written at a value nearly $500,000 greater than the $4.508 million sale price for the unit.

JPMorgan Chase wrote the $5 million mortgage for PH3C, a 2,263-square-foot apartment, to the Greenwich, Conn.-based buyer, Chelsea Vista Holdings, according to property records posted yesterday. The sale and loan documents were signed October 24, the records show.

Condo loans in New York City that were frequently written at 90 percent or more loan-to-value rate earlier this year have, for the most part, dropped to about 80 percent, mortgage brokers said.

Chelsea Stratus, a 40-story tower at 101 West 24th Street at Seventh Avenue developed by LCOR, opened in mid-May.

JPMorgan did not immediately respond to a request for comment. The buyer’s attorney also did not respond to a request for comment.

Mortgage broker Thomas Wiggin, president of Manhattan-based Thomas Funding Group, said it was unusual for a loan to be written for more than the sale price, but it was not unheard of. He was not involved in the sale and his only knowledge of the transaction was through public documents.

He said there were several ways the borrower could obtain such a sizable loan. The buyer could propose to use the money as a construction loan to remodel or build out the unit which would increase the value of the apartment, or he could put up substantial capital or other assets such as real estate as collateral.

“It is not typical for your average borrower, however it is not unheard of, especially for something in that price range,” he said. “For individuals who have sufficient credit, assets or income, financing is still readily available.”

The LCOR development is nearly sold out, with 199 out of 204 condo units under contract, and nearly all of those have closed, said building sales agent Andrew Anderson, senior vice president at Prudential Douglas Elliman, the exclusive marketing and sales broker on the project.