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Habitat Magazine Business of Management 2021

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Penn South Co-op Gets Last-Minute $190-Million HUD Loan

Chelsea

Penn South HUD Loan
Jan. 19, 2017

In the waning hours of Barack Obama's presidency, a bastion of affordable housing in New York City was given a new lease on life. The federal Office of Management and Budget announced that it has approved the Penn South co-op’s application for a $190 million loan from the federal Department of Housing and Urban Development, the Daily News reports.

“Penn South tenants can breathe a sigh of relief,” said U.S. Senator Chuck Schumer, who, with other supporters, had pushed the Obama administration to sign off on the loan before tomorrow’s presidential inauguration of Donald Trump – and the arrival of his HUD secretary Ben Carson, an avowed foe of subsidized housing.

“Our [15-member] board is gratified that we’ve gotten this commitment,” Penn South’s property manager, Brendan Keany, tells Habitat. “It secures our future as an affordable housing development over the 35 years of the loan.” The money will be used to refinance the underlying mortgages in the 2,820-unit co-op that was built in 1962. The loan will reduce the co-ops debts and allow it lock in interest rates.

The current OMB Director Shaun Donovan, who was appointed by President Obama, previously worked for former New York City Mayor Michael Bloomberg as Housing Preservation and Development commissioner, so he’s familiar with Penn South and the city’s current crisis of affordable housing. A less sympathetic hearing was expected from Carson and the rest of the Trump administration.

Last week, Schumer predicted dire consequences if the loan approval did not go through before Inauguration Day. “Families would face significant financial hardship,” he wrote, “and the stitches that bind that community would begin to unravel.”

Adds Keany, “We didn’t want to run the risk of what could have happened with the new administration.”

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