NYC Rent Freeze Puts Multifamily Underwriting in Focus

Reported underwriting changes

Fannie Mae and Freddie Mac are reportedly reassessing underwriting for New York City rent-regulated apartment buildings following the city’s newly enacted rent freeze. Bisnow said the issue concerns a market of approximately 1 million units, while other traditional financing sources have pulled back from the sector.

The City Reporter, citing anonymous landlords, advocates and nonprofit housing executives familiar with the terms, reported that Fannie Mae assumes rents will not rise for four to eight years. The reported assumption accounts for Mayor Zohran Mamdani’s current term and a potential second term; the report also said Fannie Mae projects expenses rising by at least 5% annually.

The City Reporter further reported that Freddie Mac had paused lending on these assets while evaluating the freeze’s impact.

FHFA director disputes the report

Federal Housing Finance Agency Director Bill Pulte called The City Reporter’s account “Fake News” in X posts after it was published. He said Fannie Mae remains an active financing source for New York City multifamily housing, including rent-stabilized properties, and uses a nationwide credit framework that considers a property’s financial condition and local rules affecting income and operating costs.

Pulte also wrote Monday night that Freddie Mac had not “frozen lending” on rent-stabilized properties and continued to quote and lend on them. Freddie Mac told The City Reporter that it continuously reviews market conditions and makes real-time, risk-adjusted adjustments consistent with its mission-driven objectives.

The reported underwriting terms and the public statements conflict. The source does not establish the current lending status or underwriting approach for every rent-stabilized property.

Financing had already declined

Bisnow reported that lending on rent-stabilized properties had fallen since the 2019 Housing Stability and Tenant Protection Act changed the economics of these buildings. The law eliminated pathways landlords had used to deregulate apartments or raise rents through building improvements and tenant turnover, according to the report.

Atrium Data figures previously provided to Bisnow show $27.6 billion of mortgage originations in 2019 across more than 3,700 deals involving buildings where at least half of units were regulated. In 2025, originations were under $11.3 billion across approximately 1,400 transactions.

Community Preservation Corp. reported that expenses rose 27% between 2020 and 2024 while rent grew 11%. CPC CEO Rafael Cestero told The City Reporter that CPC is using similarly conservative underwriting assumptions, expects a 10% loss in collections, and will make half as many loans to fully affordable New York City properties going forward.

The rent freeze applies to one- and two-year leases. Landlords are challenging it in court, alleging that the Mamdani administration improperly influenced the decision.