Top multifamily lender lays out the terms of relief for landlords

The federal stimulus package and state-level measures left most apartment owners out

New York Community Bank CEO and president Joseph Ficalora (Credit: Facebook)
New York Community Bank CEO and president Joseph Ficalora (Credit: Facebook)

Coronavirus relief for landlords is here, at least from one large multifamily lender.

According to documents reviewed by The Real Deal, New York Community Bank, one of New York City’s largest multifamily lenders, is offering borrowers a break on their mortgage payments. Borrowers who show their cash flows are “impacted” by Covid-19 and may become “impaired” are given two options: six months interest only and escrow payments or deferral of principal and interest for six months, payable at maturity.

Real estate escrow payments must be paid by the due date and will not be deferred, the document notes.

The simple, one-page form asks for a copy of the borrower’s most recent rent roll, the loan number concerned along with the collateral address and a written statement on the impact on cash flow the borrower anticipates.

New York Community Bank did not return a request for comment.

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The greater share of New York Community Bank’s $41.9 billion portfolio of loans is made up of multifamily loans — $31 billion at the end of last year, according to its fourth quarter earnings report.

Since the start of the coronavirus crisis, landlords have wondered what form relief will take, after they were largely left out of the federal stimulus package signed last week, except those whose tenants were already receiving rent subsidies or whose mortgages are federally-backed.

Those with mortgages insured by Fannie Mae or Freddie Mac can postpone their loan payments, on the condition that they do not evict any of their tenants for the forbearance period. According to a Fitch Ratings report, 105 multifamily borrowers representing $810.2 million in mortgage loans have already sought relief through that program.

An executive order from Gov. Andrew Cuomo and a subsequent regulation from the Department of Financial Services mandated that banks the agency oversees offer single-family home owners forbearance on their mortgages. The regulation only applied to consumer mortgages, not commercial loans secured by property.

Landlords expect that with record-breaking unemployment numbers, cash-flow from rent will be severely reduced. Although mortgage payments are typically made with the previous month’s revenue, two days after rent is due, landlords already have some indication of how impacted their rent roll will be.

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