Adam Leitman Bailey, P.C. Successfully Navigates HUD Approval Process In Achieving Interest Rate Reduction Of A Senior Citizen Not-for-profit Housing Corporation’s Underlying Commercial Mortgage.
Adam Leitman Bailey, P.C. acts as general counsel to a not-for-profit housing company for senior citizens located in Brooklyn. The building in question was in dire need of various capital improvements and repairs, but with limited cash on hand to do so. The housing company sought to take advantage of pandemic-level interest rates to reduce the rate on the building’s existing mortgage, which would free up much needed cash for the building upgrades. The catch was, reducing the interest rate on the existing loan required the prior approval of HUD, which is not always an easy (or speedy) process. With interest rates rising on a weekly basis, Adam Leitman Bailey, P.C. stepped in to expedite the approval process. By working with the lender, the managing agent and the board of directors, Adam Leitman Bailey, P.C. was able to facilitate and garner everything required by HUD to issue its approval, and within days thereafter prepared the file for closing. On the morning of closing, the parties were notified that HUD’s approval was required for the release of certain monies in the company’s reserve account to be used as a down payment for certain funds due to the lender. Having no way to obtain HUD approval on the day of closing, and facing rapidly rising interest rates and potential adjournment fees, Adam Leitman Bailey, P.C. worked with the managing agent and the lender to successfully formulate a work-around which enabled the loan to close as scheduled. As a result, the housing company achieved a reduction in its interest rate mere days before a rate increase which would have rendered any cost savings obsolete. The housing company now has cash on hand to make much needed repairs and improvements for the benefit of its elderly community.
Steven Wagner and Niki Khindri represented the housing company in this transaction.