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Whitney Gollinger, marketing chief for a Manhattan condo building with an outdoor movie theater and panoramic city views, is highlighting a different amenity to spur sales: the financial backing of the federal government.
The Federal Housing Administration agreed in March to insure mortgages for apartments at the 98-unit Gramercy Park development, known as Tempo. That enables buyers to make a down payment of as little as 3.5 percent in a building where apartments are listed at $820,000 to $3 million. “It’s a government seal of approval,” said Gollinger, a director at the Developments Group of New York-based brokerage Prudential Douglas Elliman Real Estate. “We need as many sales tools as we can have these days, and it’s one more tool.”
The FHA, created in 1934 to make homeownership attainable for low- to moderate-income Americans, is now providing a lifeline to new Manhattan luxury condominiums after sales stalled. Buildings featuring pet spas, concierges and rooftop lounges are applying for agency backing to unlock bank financing for purchasers. The FHA guarantees that if a homebuyer defaults on his mortgage, the agency will pay it. At least nine Manhattan condo developments south of 96th Street have sought approval for FHA backing since the agency loosened its financing rules in December, according to a database of applications maintained by the U.S. Department of Housing and Urban Development.
Just when you thought you’ve seen it all, the government comes through with another gem.
What’s surprising about this? How is this different from farm subsidies, giving subsidies for buying a Prius or Volt, etc? For that matter affirmative action in colleges helps wealthier blacks, not the poor blacks who can’t afford college.
We really need to get something through our head in this country. NOT EVERYONE SHOULD OWN A HOME! Some people should be renters. Especially on the low income side of the equation.
Bob (#2), You’re wrong dude!
If you own your home you still pay for it one way or another. If you own, you likely pay a mortgage and/or an HOA fee (probably a pretty big HOA fee if it’s a condo) too. So, in this case all they are doing is cutting out the individual “landlord” and substituting that landlord for either the BANK (if the owner doesn’t go bankrupt) or the GOVERNMENT!
Frankly, owning property and having equity in that property makes it much more likely that the property owner will pay his/her taxes on that property. So obviously, the government wants to get everyone owning his/her own home. (Make sense now? Renters don’t pay nearly as much taxes!)
……………………………………….
Yeah, it’s pretty outrageous. Another market distortion created by government subsidies. Just like health care and education, when government gets its filthy mitts on it in order to make things “affordable.”
AND,
as with the car exchange THING..
BEFORE and AFTER the EXCHANGE there were tons of sales, upto $6000 off..
DURING the Exchange, there were NO SALES, as you could have saved $6,000-9,000.
Which basically means that the corp would NOT LOOSE PROFIT, but would GAIN.
I really, really hate it when legislation is called “tools” that are needed to get a job done.
And so… not a damn thing was learned from the fannies of Mae and Freddie. The greatest depression ever is inevitable.
BTW, X Horowitz… renters, through their landlords, pay as much tax as owners.
take all the Unemployed..
Gov. then Runs across this country FIXING THINGS, and taxing the corps FOR IT..
If the corps cant keep the Cits, busy, then LET THE GOV.
Fix the OLD bridges,,
Fix the PARKS..
INSTALL a NEW Internet backbone..
Install an UP TO DATE TV relay system..NOT CABLE/SAT
INSTALL a NEW upto date CELL TOWER SYSTEM, then either SELL it to the corps, or CHARGE for its use BY the corps.
REDO the freeways, byways, Highways…
THIs is the time to do it..
CORPS are making TONS of money, at LEAST work the cits, so they can Earn enough to enjoy it.
At 10%, thats 30,000,000 workers.
$820,000 will buy you a concrete bunker in Manhattan. But, on the bright side, as a New York City resident you will pay Federal, State and City income tax!
This is no more idiotic than the the ability to get a Fannie Mae conforming loan over 700k(or over 900k if you live in Hawaii).
If we aren’t supporting conspicuous consumption then it is all down hill from here…
I suggest that you read the article before commenting. It’s not like you can just walk up and apply. The building needs to qualify, and you need to qualify for the loan in the eyes of the bank, something really difficult to do these days.
Actually Awake, if you read the article you’ll see that you have it completely wrong.
“The FHA is considering a minimum required [credit] score of 500, according to a notice the agency filed in the Federal Register on July 15. A person with a 500 rating is in the lowest one percentile of credit scores nationally and was likely delinquent on several accounts in the last year”
And to top it off the shit is hitting the fannie already.
“Nine percent of all FHA-insured loans were 90 days or more past due or in the process of foreclosure in the first quarter, compared with 7.4 percent a year earlier, data from the Washington-based Mortgage Bankers Association show. “
We really don’t have a “free enterprise” system in America. When the government is always bailing out, and subsidizing failures, that have political ties, that the honest and successful competitors don’t. Basically the gov. is “gaming” our system. So nobody fails, if they’re well connected, politically. And those that didn’t pay their Republican or Democratic dues, get to go under, because they can’t compete with those that have government help. And the FHA is now helping out Developers (not homeowners) who build mega-homes during a down economy. In other words, another bailout.
#13 and #14,
Like I said, RTA, and maybe learn a little more about how these systems work.
Less than 2000 units, at the very low end of the pricing range for these complexes, would be eligible for FHA support, since FHA caps out at $730,000, and the median price of a Manhattan apartment in a new development was $1.4 million. Even then, a minimum of 3.5% down, plus initial and annual fees, would be required to qualify at all. You don’t get the money from the FHA, you get the money from the bank, which still has to approve the loan, something they are very hesitant to do these days, since the FHA can refuse to back the loan if it seems that the loan is unfounded.
Should getting into Real Estate be so cheap? It depends on the locale. If apartments are going for an average of $1 million, and people are expected to pay 20% down, then it is VERY difficult for people to buy property. So asking for %5 down is reasonable. Asking for 20% down in areas that housing is $150,000 is also reasonable. The ignorant answer is that if housing is too expensive it should be allowed to fall according to market conditions… the reality is that a stable market is to everyone’s benefit.
And that is the point of this program… to stabilize the housing market (or help provide a ‘soft landing’) due to an excess of available housing.
The collapse of housing prices has led this country to the edge of economic ruin. During the Clinton and Bush years an unrealistic housing bubble was allowed to build (started during Clinton, but totally unmanaged and highly encouraged by the Republicans), and when it popped it almost took the entire country with it. Programs like this are meant to help stabilize the housing market by filling vacant places and helping stabilize falling housing prices. It may cost the govt $10 Billion if the units in question all go belly-up, but it may cost $100 billion in revenues if all housing goes down due to a lack of buying capacity.
Economics can be complicated… maybe I’m being unrealistic to expect Pedrito to understand the topic. For once, it would be nice to read some intelligent response from Pedrito besides just calling me ‘asleep’ and saying nothing worth reading. Yeah, like that is going to happen.
Oh, am I to understand that there are some rich Republican Americans who have unfortunately subverted the intent of our housing laws for personal gain at the broad public’s cost?
Oh and further, am I to understand that the rich criminals who have stolen from the public at large, have then also pointed to the very same public program which they have damaged themselves, for evidence of damage?
What a bad joke. Silly Republican thieves and public enemies, don’t you know, your tricks are for kids?
This story is simply more of the Standard Republican Propaganda and it is always the same story, repeated over and over against all the public programs where rich people are not the beneficiaries.
The standard Republican scam goes like this:
Step 1. Republican rich guys steal from the public funds. (Wash)
Step 2. Republican rich guys point to the evidence of corruption in the use of public funds, as basis for propaganda that “reform is sorely needed.” (Rinse)
Repeat as needed. (Repeat)
Jail these Grand Old Pilferers and Propagandists for stealing. Jail them. Jail them NOW.
This GOP cycle of theft and propaganda is reliably targeted at all the public programs that rich guys don’t personally derive monetary benefits from.
Republicans steal from the public, then point to the damage they created as evidence of criminal behavior as illicit justification for their specious calls for “reform” of public programs.
Original bailout…
What did it do?
IT PAID SALARIES and BONUS..
It didnt Bailout anyone.
It paid for nothing.
It kept those companies in business.
AND NOW the foreclosures.
For all the money spent, the FHA could have walked in with BANK backing, and PAID off the OLD loans, and RE-DO a NEW one that favored the Home OWNER.
NOT A CHANCE.
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