Fannie, JPMorgan Chase Enhance Bonds

Fannie Mae and JPMorgan Chase Bank have agreed to provide $44 million of credit enhancement for tax-exempt bonds issued by the New York City Housing Development Corp. for the development of a 231-unit apartment building in East Harlem.Fannie Mae executives said it was "no small task" to put together such a complex transaction "for the first time in New York." It is a new HDC program for mixed-use, mixed-income rental housing operated in cooperation with the New York City Department of Housing Preservation and Development, which sold the land site to the developer. The department requires that once the property is resold, "the difference between the appraised value and the one-dollar amount will be repaid to New York City." JPMorgan Chase has provided the construction loan enhancement, while Fannie Mae has arranged the long-term credit enhancement. Forty-seven units will be available to low-income households that earn no more than 50% of the area median income (at $31,400), another 63 units are reserved for middle-income households earnings up to 250% of area median income (at $157,000), and the remaining 121 units will be rented at market prices.