Co-Op City’s $622M Refinancing Deal Frees Up $124 Million for Repairs to Bronx Housing Complex
Real Estate In-Depth | April 28, 2022
NEW YORK—A host of federal, state and city agencies have closed on the refinancing of a $621.5-million U.S. Housing and Urban Development loan with Riverbay Corp., the management company for Co-op City in the Bronx.
The refinancing deal announced on April 27, provides Riverbay Corp. with $124 million in proceeds that will be used for capital improvements, including upgrades to the HVAC, façade maintenance, and electrical systems at the nation’s largest cooperative housing development.
“My administration is committed to maintaining access to safe, quality affordable housing that enables New Yorkers to live with the dignity they deserve,” Gov. Kathy Hochul said. “This transformative injection of capital funding will allow us to modernize Co-op City, the largest housing cooperative in the world, and ensure long-term affordability for its 45,000 residents.”
United States Department of Housing and Urban Development Secretary Marcia L. Fudge said, “We applaud the successful completion of the refinance for the Bronx’s Co-op City Complex. The Biden-Harris Administration and HUD are committed to stabilizing the housing market nationwide using every tool at our disposal, including utilizing Federal Housing Administration multifamily mortgage insurance as a key financing source. From supporting larger loans in major metropolitan areas to smaller loans in rural communities and suburbs, HUD is proud to be a partner in creating and preserving affordable housing across the country.”
U.S. Sen. Charles Schumer said, “The Bronx’s Co-op City provides an affordable home to more than 45,000 New Yorkers in an increasingly expensive housing market. That’s why I worked to secure a timely refinance agreement for Co-op City, which will help maintain the quality, viability and long-term affordability of this one-of-a-kind community. The deal will also improve the lives of the residents by allowing repairs and other improvements to be made, all while providing affordable housing for generations to come. We haven’t stopped pushing and working with HUD to lock in the refinance and we are proud to announce HUD approval.”
U.S. Rep. Jamaal Bowman said, “Co-op City is truly a one-of-a-kind community, home to the largest affordable housing cooperative in America and more than 45,000 constituents that I am honored to serve. It is imperative that the Co-op City community has the funds needed to maintain their affordable housing and commercial space, which supports all who live there. I am proud to have worked alongside the U.S. Department of Housing and Urban Development under Secretary Fudge’s leadership, Majority Leader Schumer, and Governor Hochul to advance a timely refinance agreement for Riverbay Corp, which will unlock significant capital funds for urgent repairs. Co-op City is a prime example of what cooperative housing can look like across this nation and I look forward to seeing how this loan refinance will continue to support making this community even more sustainable, livable and affordable.”
The restructured $621.5 million mortgage loan from Wells Fargo extends the term of affordability for an additional 10 years and provides $124 million for the cooperative to undertake necessary capital repairs. With 15,372 homes, Co-op City is the largest cooperative housing development in the world. The Mortgage Insurance Fund of the State of New York Mortgage Agency, which is part of New York State Homes and Community Renewal, and the New York City Housing Development Corporation, will provide credit support with $55 million and $15 million coverage of the loan, respectively.
The loan includes $15 million for immediate capital repairs, including approximately $10 million for balcony and façade repair, $2.5 million for the replacement of residential water pumps and $2.5 million for the replacement of garage elevators. The loan also includes $109 million to replenish a reserve account for future repairs, all without raising maintenance charges for residents.
Co-op City Board President Bernard Cylich said of the refinancing deal, “This loan will assist us to maintain our buildings and infrastructure while reducing the need for our residents to pay huge fee increases. On behalf of the Board of Directors and residents, I want to thank all of the government agencies and elected officials who have supported us and worked together to get this loan closed.”
The 2012 Wells Fargo mortgage loan to Riverbay Corporation was the largest ever insured under the Department of Housing and Urban Development’s Sec. 223(f) program, which protects lenders against loss on mortgage defaults at multifamily properties.
Co-op City sits on 320 acres in the Northeast Bronx and has multiple schools, three commercial malls and its own power plant.