It's sometimes said that Manhattan luxury condominiums sell themselves, and a trip through our Manhattan condo listings will surely bear that out for a few NYC apartment buildings. But it's just an expression, finally, and most NYC luxury condos -- even the best of the best -- don't necessarily sell themselves. Yes, the Manhattan apartment market is surging, but with real estate watchers concerned about a double dip in the housing market and the local and national economies still sputtering, the investment of money and confidence required in buying a Manhattan condominium is no small thing. In reality, most NYC condos require no small amount of selling, which is where price cuts come from, among other things. Recently, developers have hit upon a new -- and, for once, very factual and very useful -- new marketing tool. That would be the approval of the Federal Housing Administration.FHA-approved condos offer special and extra-appealing benefits for apartment hunters, but they also offer the added reassurance that the FHA-approved condo building in question is a safe investment, and one on good financial footing. Given that apartments don't sell themselves -- and given that this bit of salesmanship has Uncle Sam's imprimatur -- it's easy to see the appeal of FHA-approved condos, and easy to see why the FHA-approved status has become such an important thing in the Manhattan condominium market. In Bloomberg, Oshrat Carmiel explains the appeal of FHA-approved condos.
"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," Carmiel writes. "The FHA is filling a void left after mortgage-finance agency Fannie Mae tightened its condo lending standards last year. The Washington-based company won’t back loans made in new buildings where fewer than 51 percent of the units are in contract, sometimes setting a requirement as high as 70 percent."
As finding private financing for luxury condos becomes harder to come by, the NYC real estate market has been forced to adapt. Not a single Manhattan luxury condo even applied for FHA approval between 1998 and 2008, but as anyone who has followed the NYC real estate market over the past two years -- or just glanced at a newspaper during that time -- surely knows, times have changed. Luxury condos in New York City aren't going to become any less appealing, of course. But selling themselves? Not anymore, or at least not without the added reassurance of FHA approval to help things along.