Fannie cuts Battery Park City a break

Thanks to Fannie Mae, Battery Park City residents hoping to sell their apartments can breathe a little easier. Fannie Mae is going to back loans in this waterfront neighborhood now that it has completed its review of the neighborhood’s ground leases.

Battery Park residents live on land leases which means they have to pay rent for the land their buildings stand on. Each of the dozen or so buildings in the area has its own ground lease. Those ground lease fees are factored into the residents’ monthly payments and could more than double as the leases expire in 2011. That potentially steep rise would have to be taken into account in the underwriting of loans in the neighborhood.

Fannie Mae has been reviewing these ground leases for the past two months and is now sending a letter to the lenders who have originated—or have expressed interest in an intent to originate—mortgages secured by condominiums in Battery Park City, informing them that the ground leases on the established condominium projects have been reviewed and are acceptable. Fannie May said they will continue to accept deliveries of eligible loans secured by condominium units in Battery Park City.