Fannie cuts off funding in Battery Park City

Mar.March 25, 2010 05:48 PM

Fannie Mae has backed out big time at Battery Park City, ceasing its purchase of individual mortgages on apartments, according to Crain’s, making it increasingly difficult to sell condos and co-ops in the neighborhood. While Fannie Mae has taken a stricter stance across the country, residents and brokers at Battery Park City say the federal agency has shown an especially drastic pullback there, due in part to the rapidly-changing ground lease fees. Unlike other neighborhoods in the borough, residents at Battery Park City pay to rent the land where their buildings stand — and that rate could, potentially, double when the current lease expires in 2011. Richard Martin, a senior vice president with DE Capital Mortgage, said that the neighborhood is suffering as a result. “Battery Park City is getting hit hard,” Martin said. “Underwriters consider the area a declining market.” And sales figures in Battery Park City are reflecting that pain: residential sales in the neighborhood dropped 59 percent in February 2010 compared to the same month a year earlier, according to StreetEasy.

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