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Katherine (K…, Real Estate Pro in Harlem, New York, NY

HDFC specifics in Manhattan?

Asked by Katherine (Kate) Shindle, Harlem, New York, NY Sun Aug 19, 2012

Hi--

I am looking at a property that falls under the HDFC program, and seems to be a great value.

I know that in this part of the city, many of the original tax abatements/income restrictions will be expiring soon.

How do I find out exactly when that happens? Asked the listing agent, who doesn't seem too familiar with the program. Is it the kind of info I can find on Property Shark?

Also, how does the expired tax abatement typically affect the maintenance cost in a co-op?

Thanks in advance for any help you can offer!

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I am pretty familiar with many HDFC's in Harlem. I am not a broker- just love real estate and I am helping a friend search for an HDFC since we have encountered so many poorly educated brokers. Based on my experience, I wouldn't count on an HDFC with income restrictions expiring unless you have confirmation from the co-op board and/or building manager that they are considering exiting the program upon maturity of the initial period- which would mean not only higher taxes but also other cost increases such as energy which is subsidized in the program. Often many of the original owners can not afford a hefty increase in maintenance that would follow exiting the program/ lifting the income restrictions. Your real estate agent should contact the managing agent- and ultimately a good real estate attorney should evaluate the deal before you sign the contract. Also keep in mind that each HDFC is structured differently- some have very well defined income restrictions, while others focus on a formula that is more of an affordability factor of the buyer- making sure you can safely afford the apartment. Yet others have loopholes in the income restrictions that allow you to earn well above the income limits- but regardless this should all be in the original documents accessible to your attorney from the board of directors or the managing agent.
0 votes Thank Flag Link Mon Aug 20, 2012
Kate,
It is a misconception that HDFC agreement expires. While the Regulatory agreement (usually 25 or 30 years) may expire, the building is still incorporated as HDFC and that never expires.
I always hear lots of brokers and agent ask, when is the program expiring? Well, it really doesn't.
What may happen after the Regulatory agreement expires is that the coop changes the by laws. This can be done only if 2/3 of all shareholders vote for it.
Tax abatements can sometimes be extended , you can do a lot of research yourself at the city register.
Find out the block and lot number and look up the building. In general, you should find the deed, regulatory agreement and other information.
if you decide to go forwards with a purchase, it is imminent important to find an attorney who is well versed in this matter.
One attorney I can recommend is Jiyoung Cha ofMallin, Schwartz Y Cha. Barry Mallin has been one of the first attorney's in the 70's to help set up HDFC in New York. She is very knowledgeable. I just took 2 HDFC workshops for brokers at her office as i do lots of HDFC.


Jiyoung Cha, Esq.

Mallin, Schwartz & Cha, P.C.
132 Nassau Street
New York, New York 10038
(212) 285-1200, Ext. 15
Fax: (212) 285-1202
Email: jiyoung@mallinlaw.com
Web: http://www.Mallinlaw.com
0 votes Thank Flag Link Mon Aug 20, 2012
Kate:

Your best advice on this issue will come from your attorney so I'd be sure to check there for definitive answers on Housing Development Fund Corporation properties (HDFC).

Generally all condos/coops will have a Prospective that's available to anyone interested in purchasing. There should be information about HDFC and how it affects the purchase, sale, or other transactions.

Albert Capozzelli
Licensed Real Estate Salesperson
A.C. Lawrence & Company
0 votes Thank Flag Link Sun Aug 19, 2012
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