Friday, January 23, 2015

Looking For A Mortgage To Buy A Roosevelt Island Apartment? - Island House Residents Listen To Amalgamated Bank Mortgage Presentation Last Night

Image of Island House Entrance

Roosevelt Island's Island House rental building exited the Mitchell Lama program in September 2012.  As reported October 20, 2012 by former Roosevelt Island Operating Corp (RIOC) Acting President and current General Counsel Don Lewis:
... We are very pleased to note that, as result of several years of negotiations, Island House, a 400-unit affordable housing development on Roosevelt Island, will continue to remain affordable to its residents for the next 30 years. The Island House deal is historic in nature and marks the first successful conversion of a State Mitchell-Lama rental to affordable home ownership as a solution to a market-rate exit from Mitchell-Lama. Without the State’s intervention in extending affordability, apartments within Island House, a development at the threshold of leaving the Mitchell-Lama program, would have been allowed to be rented at market rates, severely affecting residents.

Under the Island House Affordability Plan, Island House, constructed in 1975 as one of the first four modern housing developments on Roosevelt Island, will exit the Mitchell-Lama program. The Affordability Plan, however, protects all current tenants by allowing them to remain in their apartments with future rent increases calculated in a manner similar to rent stabilized apartments. Rent protection will remain in effect for 30 years. The owner of Island House will apply to convert the building to Co-Op ownership. If the conversion is approved, current tenants will be offered the option to purchase their apartments at below market prices.

The Affordability Plan was initially drafted and agreed upon by the Island House owner and tenants. The Plan was later approved by a multi-agency working group that included: RIOC, which administers operations on Roosevelt Island; New York State Homes and Community Renewal (HCR), the State’s housing agency, which administers both the Mitchell-Lama program and the State’s rent laws; and Empire State Development (ESD), which in 1969, as the Urban Development Corporation, first leased the land under Island House from the City of New York. The Affordability Plan was the result of several years of negotiations among the agencies, the Island House Tenants Association, and owners’ representatives....
Island House is currently in the process of converting to a Condop (Co-op for residential units and condo for commercial units) under a non-eviction Affordability Plan.

Last night, January 22, Island House residents interested in purchasing their  Roosevelt Island apartment listened to a mortgage presentation by Amalgamated Bank Vice President Eric Ruskiewicz.

Here's what happened.

Part 1. Discussion of
  • 20% down payment in two parts (10% at March 31 contract date and another 10% at closing date which is not yet known - speculation is June/July 2015),
  • Interest Rates,
  • Locking Interest Rates,
  • Closing Costs
  • issue regarding errors in names on apartment lease and 
  • pre-approval letters.

Part 2. Discussion of:
  • Locking Interest Rates,
  • Amalgamated Bank fully committed to mortgage lending at Island House,
  • Island House Ground Lease,
  • Commitment Letters,
  • Documents needed for mortgage application,
  • Credit Scores,
  • Amalgamated Bank keeps their mortgage loans and does not sell to secondary market.

Part 3. Discussion of:
  • Bringing lawyer to closings,
  • No minimum number of units in building need to be purchased in order to close on apartments,
  • What happens when building ground lease expires (Not known),
  • Apartment appraisals.

Part 4. Discussion of:
  • Down payments,
  • Meaning of pre-approval letter,
  • Locked in interest rate,
  • Application information,
  • Home Equity Loan on Island House apartment not allowed and
  • Mortgage discount for opening account at Roosevelt Island branch.

Part 5. Discussion of:
  • No Pre-payment penalty,
  • Allocation of principle and interest payment,
  • Non taxable income counted higher on application and
  • Credit checks.

More information on the Island House exit from Mitchell Lama program and Affordability Plan at this June 2012 post.

Also additional information on mortgages for Roosevelt Island apartments available at prior Amalgamated Band presentation.