A handful of newly renovated affordable townhouses are arriving on the market with quite a bit of history attached to them all around. These very distinct looking 3- and 4- family brownstones are located in Central Harlem, with Energy Star appliances, quality finishes, internet and cable-ready, laundry room and rear yard. The prices are $960,753 and $1,042,551 for entire buildings but there are income restrictions. To qualify, the buyer must be a NYC resident and the household income cannot be over $130K. Check out some of these newly restored middle class dwellings and how one of them in particular is next door to a big part of Harlem history.
This house at 15 West 131st Street (at center) sits directly next door to the residence formerly owned by the man known as the Father of Harlem. Phillip A. Payton Junior lived at 13 West 131st Street (at right) and was credited to having brought the black middle classes from lower Manhattan to Harlem back in the early 20th century:
LINK. More recently, there was a huge population decline uptown until the past decade and now it appears another Harlem institution has started focusing on a middle class demographic.
The 131st Street townhouse, the barrel-front house at 203 West 121st Street (last photo) and the brownstones at 357 West 116th Street (at top photo) have all been renovated by the Abyssinian Development Corporation which is the real estate branch of the famous Harlem church and the stipulation beyond the income cap is that the homes are owner occupied for at least 7 years. A middle class income in the Manhattan basically starts out in the low six figures so these townhouses appear to geared towards this particular set of homeowners. Open houses will be next week on June 15th and 16th from 4:00 PM-7:00 PM. More details on the ADC site:
LINK
I think it is great to offer these townhouses to the "middle class" but am I the only one to think it is risky for someone who makes $130K or less to spend a million bucks on a brownstone?
ReplyDeleteWasn't there a ballpark of 5 years salary or something for your mortgage?
Only thing I can think of mg is the buyer has around 40% to put down.
ReplyDeleteAlso works out to be incredibly low $ per sq. ft. Decent deal if you have the $.
ReplyDeleteIt is pretty tight in terms of affordability on $130k, however, don't forget about the 3,600 per month of potential rental income on two one-bedrooms.
ReplyDeleteThe rental income makes the numbers work easily.
It seems like a great deal and I wish I had the money. Actually my wife and I together make about $130K. But no one who is legitimately middle class and makes < $130K can put that much down $ or take the landlord risks of not having a tenant for more than a few months.
ReplyDeleteThis reminds me of those HDFCs with low income limits and very high maintenance.
The numbers actually work quite well... Let's say you start with $1M sale price. $200K (20%) down means an $800K mortgage which will run about $5,000/mo. Assume a 25% vacancy rate and $3600/mo in rent give you $2700/mo to put towards mortgage, leaving the homeowner with a $2300/mo to pay out of pocket. If they're in a 30% tax bracket it means they can take about a $700/mo deduction, bringing their net mortgage expense down to $1600/month. Add to that maintenance costs (which should be minimal on a newly rehabbed building) and they're probably paying under $2000/month for a townhouse in Manhattan. IMHO, that's pretty incredible...
ReplyDeleteSure the numbers work great but raise your hand if you know someone that makes <130K per year who has managed to save up $200K that they can use to buy a brownstone.
ReplyDeleteYou'll also need to find someone to underwrite this pretty risky loan...maybe fha?
@mg - It's not hard to have $200K cash if you bought a coop or condo 10 or 15 years ago. You just have to be "of a certain age" and own your place rather than rent. And the loans aren't risky - 20% down and well within acceptable loan limits is a no brainer for a bank - those are the types of loans they want. No FHA required - in fact you'll get great terms - it's just a regular loan. HOWEVER, 3+ family loans do need an extra check that if the building were fully rented the income can cover building expenses (including mortgage).
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