New Lending Options for Co-ops Alternative Programs Open Their Doors

In the first cold day of the season, a group of res- idents and politicians stood in front of the

Griffin, a 199-unit co-op in Brooklyn, trying to stay warm. You're not cold are you? exclaimed Jeannette Gadson, deputy borough president of Brooklyn. I feel good! So much has been accomplished, everyone should be proud of themselves, she added.The crowd cheered when their prayers for warmth were granted as their old mortgage went up in fiery flames before their eyes.

Saved from Default

The 63-year-old Griffin was originally built as an apartment hotel and converted to a cooperative in 1987. At the time a little more than half of the units were sold and very few were purchased since, mostly due to the building's heavy debt and uncertain future. In 1992, the co-op's $4.25 million mortgage was taken over by the Federal Deposit Insurance Corporation (FDIC) after it defaulted on its payments. Just on the brink of disaster their board contacted local politicians who informed them about a new loan program that could solve their problems. Through a $2.6 million loan provided by the Community Preservation Corporation (CPC), a not-for-profit mortgage lender that specializes in financing low- and moderate-income housing, they were able to negotiate a buy-out of the old mortgage and received a new mortgage to help with repairs to the building. The new mortgage was signed by the board president on October 21, 1995, two weeks before the mortgage burning.

With several new loan programs becoming available, buildings like the Griffin can now qualify for loans they were not previously eligible for due to financial problems or small size. The CPC program that saved the Griffin was established in 1994 when Governor Mario Cuomo signed legislation that was strongly supported by Queens Borough President Claire Shulman. It combines public and private funding, a total of $100 million, to help guarantee the loans and to give buildings a new start.


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