Developers of P.S. 90 in Harlem Get Feds to Back Mortgages for Luxury Condos

May 18, 2010 1:53pm Updated May 19, 2010 1:55pmcommentprint

With the federal government's support, it could be easier for some buyers to get $450,000 to $899,000 apartments.

An artist's rendering of what the P.S. 90 condo building will look like when the renovation is completed.

By Jon Schuppe

DNAinfo Reporter/Producer

MANHATTAN — The developers converting a century-old former Harlem public school building into luxury condominiums have turned to the Federal Housing Administration for help backing buyers’ mortgages.

L+M Development Partners Inc. announced Tuesday that the FHA had approved the former PS 90 building for its loan program, which allows qualified buyers to make down payments as low as 3.5 percent. Condos in the building are going for as much as $899,000.

Eighteen of the 75 units have sold so far, L+M executive vice president Lisa Gomez said.

The FHA program "absolutely will help," she said. "In times when banks are underwriting very conservatively, it helps to have every tool possible in your arsenal."

Traditionally, FHA-insured mortgages have been considered a tool for underserved communities during tough times. But as the federal government tries to jumpstart the housing economy, it has made the FHA loans available to more expensive properties. That has led to an increase in FHA-backed mortgages in New York, including luxury condominium projects like P.S. 90.

The six-story Beaux-Arts building at 148th Street and Adam Clayton Powell Boulevard was built in 1905 and once stood as a symbol of New York’s grand public-works architecture. But it became an emblem of Harlem’s decline after an asbestos discovery forced the city to abandon it in the late 1970s. The school became populated with drug dealers and addicts and fell into serious disrepair.

During the last housing boom, L+M Development Partners and a local housing advocacy group, Harlem Congregations for Community Improvement (HCCI), hatched a plan to remove the asbestos, gut the interior and convert the classrooms into condos.

The new apartment units range in size from studios to three-bedrooms, and in price from $450,000 to $899,000.

Under a deal with the city, developers set aside 10 studios and 10 one-bedrooms as affordable housing for area residents, priced at about half the market rate.

Sales began last September. The developers and their real estate broker, Halstead Property Development Marketing, say construction is almost completed and they expect people to start moving in this summer.

Nine of the affordable units are under contract, and there are potential buyers for four more, Gomez said. The remaining seven units are available, she said.