Five Boroughs · New York City · Updated September 2026
A NYC commercial mortgage is sized on the building's own income, then stress-tested against rules no other market has: a rent freeze on stabilized apartments this lease year, assessments set at 45% of market value, and emissions limits on buildings over 25,000 square feet.
By Michael McGovern, Founder | 25+ Years in Commercial LendingCommercial Mortgage Connection · Yonkers, NY The short answer
A NYC commercial mortgage is underwritten on the building's net operating income, not on the asking price, and four local rules decide how much of that income a lender will count. Rent-stabilized apartments get no increase at all on leases starting between 1 October 2026 and 30 September 2027. Apartment and commercial properties are assessed at 45% of market value, with increases phased in over five years. Buildings above 25,000 square feet carry emissions limits. And the mortgage recording tax is a real line in your closing costs.
- Stabilized rent roll: underwrite flat rents this lease year, because the Rent Guidelines Board set 0%.
- Taxes: the assessment keeps stepping up 20% a year even when rents do not move.
- Over 25,000 sq ft: lenders now ask about Local Law 97 before they size the loan.
- Value-add or vacancy: a bridge loan first, then a refinance once the building is stabilized.
Facts verified 23 September 2026 against the NYC Rent Guidelines Board, the NYC Department of Finance, the NYC Department of Buildings, New York State Tax, Fannie Mae and HUD. Nothing on this page is a rate quote or an offer.
What this page covers
- Four NYC rules that change the loan
- What a NYC building earns and spends, by borough
- How a NYC commercial mortgage gets sized
- Loan options for a five-borough deal
- Borough by borough
- Rent-stabilized buildings and your loan
- What a NYC lender will ask you for
- When a NYC deal does not pencil
- How a broker helps on a NYC file
- NYC commercial mortgage FAQ
Four NYC rules that change the loan
Every commercial lender starts with the same two tests: does the income cover the debt, and is the loan small enough against value. New York City adds four local facts that move both answers before you ever get to a term sheet.
| Rule | What it says | What it does to your loan |
|---|---|---|
| Rent Guidelines Board Order #58 | Adopted 25 June 2026: 0% for one-year and two-year leases commencing on or after 1 October 2026 and on or before 30 September 2027 | No rent growth to underwrite on the stabilized units for a full lease year |
| Property tax class and assessment | Class 2 covers residential property that is not one to three units; Class 4 covers commercial and industrial. The level of assessment is 45% for classes 2, 3 and 4, and 6% for class 1 | Sets the tax line, the single largest expense in most NYC buildings |
| Assessment phase-in | Increases are phased in at 20% a year, and that transitional value applies to all class 4 properties and to class 2 rentals, co-ops and condos with more than 10 units | Taxes keep rising for years after a purchase, so lenders trend the expense up |
| Local Law 97 | Applies to a building over 25,000 gross square feet, and to two or more buildings on the same tax lot that together exceed 50,000 gross square feet; limits began in 2024 and get stricter in 2030 | Retrofit cost or penalty exposure that lenders reserve for on larger buildings |
The mortgage recording tax is the fifth item, and it is a closing cost rather than an underwriting test. New York State charges a basic tax of 50 cents per $100 of debt, a special additional tax of 25 cents per $100, and an additional tax of 25 cents per $100, which is 30 cents inside the Metropolitan Commuter Transportation District. New York City adds its own tax on top: $1.00 per $100 on mortgages under $500,000, and $1.75 per $100 on commercial mortgages of $500,000 or more, which brings the combined rate to 2.05% and 2.8% respectively (New York State Form MT-15, Table 4). The Department of Finance points buyers to the ACRIS calculator for the exact figure on a given mortgage, and your title company will confirm it before closing.
What a NYC building earns and spends, by borough
The Rent Guidelines Board collects real income and expense filings from owners of rent-stabilized buildings and publishes them every spring. The table below is from the 2026 study, released 26 March 2026, covering 2024 filings. It is the closest thing to a public benchmark for what a lender will accept on your operating statement.
| Borough | Average gross income | Median operating and maintenance cost |
|---|---|---|
| Manhattan (all) | $2,697 | $1,422 |
| Core Manhattan | $3,506 | $1,606 |
| Upper Manhattan | $1,828 | $1,163 |
| Brooklyn | $1,818 | $985 |
| Queens | $1,747 | $1,038 |
| Bronx | $1,336 | $967 |
| Staten Island | $1,297 | $944 |
| City excluding Core Manhattan | $1,630 | $1,013 |
The same study gives the bottom line for buildings that contain at least one rent-stabilized unit: in 2024 the average rent was $1,681 per unit per month, average income was $1,890, average operating cost was $1,203, and average net operating income was $688. It also reports that 9.2% of those buildings were in distress, which the board defines as negative net operating income. That last number is why NYC lenders read the expense side of your statement as carefully as the rent roll.
How a NYC commercial mortgage gets sized
Two tests run at the same time, and the lower answer wins. Debt service coverage asks whether the net operating income comfortably exceeds the annual loan payments. Loan-to-value caps the loan against the appraised value. Fannie Mae's Small Mortgage Loan program, a common fit for five-borough apartment buildings, sets a maximum loan-to-value of 80% and a minimum debt service coverage of 1.25x.
Here is the arithmetic on a plain example. Say a 20-unit Bronx walk-up nets $700 per unit per month after real expenses. That is $168,000 of net operating income a year. At a 1.25x minimum, annual debt service can be no more than $134,400, or $11,200 a month. At an example 6.50% rate on a 30-year amortization, that payment supports a loan of roughly $1,772,000. If the building is priced at $2,400,000, the loan is about 74% of price, so coverage, not the 80% cap, sets the ceiling. The rate is an illustration, not a quote.
Two numbers move that result more than anything else in NYC: the tax line you are underwritten on, and the vacancy and collection loss a lender applies to a stabilized rent roll. Our guide to the loan-to-value ratio on apartment loans explains the second test in detail, and the walkthrough for financing your first apartment building covers what lenders check on a first deal.
Loan options for a five-borough deal
Most NYC requests land with one of five kinds of lender. Which one fits depends on the building's condition, the share of stabilized units, and how long you plan to hold.
| Loan type | Best for | Key terms | Watch for |
|---|---|---|---|
| Local bank or credit union | Buyers with a relationship and clean stabilized buildings | Terms vary by bank; personal guarantees are common | Shorter terms and balloon payments |
| Portfolio lender | Mixed-use with ground-floor retail, unusual files, foreign nationals | Held on the lender's balance sheet, with more flexible underwriting | Pricing varies widely |
| Fannie Mae Small Mortgage Loan | Existing, stabilized buildings with 5 or more units | Up to $9 million, 5- to 30-year terms, up to 80% of value, at least 1.25x coverage, fixed or variable rate | Needs a stabilized property; yield maintenance or a declining prepayment premium |
| HUD 223(f) | Long holds on existing apartment buildings | Terms up to 35 years, up to 83.3% of value for market-rate properties, building completed at least 3 years | Slower approval; not for substantial rehabilitation |
| Bridge loan | Vacancy, renovation, or a deadline a bank cannot meet | Short term, sized on cost or as-is value, often with an interest reserve | Higher cost; needs a clear refinance plan |
The rate structure matters as much as the program on a NYC hold, because prepayment terms decide what an early sale or refinance costs you. Our guide to fixed vs variable rate commercial mortgages compares them, and the apartment building loans page lists what we place most often.
Borough by borough
The five boroughs are five different underwriting conversations, and the Rent Guidelines Board numbers above show why.
- Manhattan. The highest income per unit in the city at $2,697, and the highest costs at $1,422. Deals skew larger, mixed-use with ground-floor retail is common, and lenders look closely at the commercial income share because retail vacancy hits coverage first.
- Brooklyn. Gross income of $1,818 against the second-lowest median costs at $985. Walk-up and small elevator buildings dominate the requests we see, and the spread between stabilized and free-market units in the same building is often the whole underwriting story.
- Queens. Income of $1,747 with costs of $1,038, the narrowest gap of the outer boroughs. Two- to four-family and small multifamily stock means many buyers are choosing between residential and commercial financing.
- The Bronx. Income of $1,336 against costs of $967. Heavily stabilized stock, so the registered rents and the violation history carry more weight than the rent roll a seller shows you.
- Staten Island. Income of $1,297 and the lowest median costs in the city at $944. Smaller buildings, fewer agency-sized loans, and a local bank is often the best fit.
Rent-stabilized buildings and your loan
Rent stabilization is not a reason lenders decline NYC deals. It is a reason they underwrite the rent roll you can prove rather than the one you hope for. Order #58 set 0% on one-year and two-year leases commencing on or after 1 October 2026 and on or before 30 September 2027, so for a full lease year the stabilized line of your projection does not grow.
That makes three things decisive. The registered rents filed with the state, because a lender will check them against your rent roll. The share of units that are stabilized versus free market, because it sets how much of the upside is real. And the expense trend, because taxes, insurance and payroll keep climbing while the stabilized rents sit still.
A building where every unit is stabilized is financeable, and plenty of them trade every year. It simply needs an equity check and a business plan that assume flat rents, not a turnaround.
Refinancing a building financed before the 2019 rent law, or buying in Brooklyn? Our full guide to rent-stabilized building financing after the 2019 rent law covers the maturity gap, improvement increases and what lenders will size today.
What a NYC lender will ask you for
A complete package moves faster than a strong one that arrives in pieces. For a five-borough building, expect this list.
- Rent roll showing each unit as stabilized, rent-controlled or free market, with lease dates.
- State rent registrations for the stabilized units, plus any preferential rent riders.
- Trailing 12 months of income and expenses and the last two years of operating statements.
- The property tax bill and current assessment, since the transitional value tells the lender where taxes are heading.
- Violation searches from the Department of Buildings and Housing Preservation and Development, with a plan for anything open.
- Certificate of occupancy and, where the building requires it, the current facade inspection filing.
- Local Law 97 status for any building over 25,000 square feet, including benchmarking reports.
- Borrower package: schedule of real estate owned, net worth and liquidity after closing, and credit for every key principal.
When a NYC deal does not pencil
Some files should not be forced. If the only way the numbers work is by using the seller's projected rents on stabilized units, wait. If there is no cash left after closing, wait, because a NYC building will find a capital expense in the first year. If the building is over 25,000 square feet with no emissions plan and no reserve for one, price that in before you sign a contract.
The fix is usually one of three: a lower price, a partner who brings experience and liquidity, or a bridge loan with a written refinance plan instead of a permanent loan the building cannot support yet.
How a broker helps on a NYC file
Commercial Mortgage Connection is headquartered in Yonkers, minutes from the Bronx, and places loans through a network of 750+ lenders in all 50 states. On a five-borough file that means knowing which lenders are comfortable with heavily stabilized rent rolls, which ones price mixed-use retail sensibly, and which ones will move at the speed a New York contract demands.
Michael McGovern reviews each file himself. If the building does not pencil at the price, or the package needs a partner or more equity first, you hear that before you spend money on third-party reports. For the broader picture of how we work, see our Yonkers commercial mortgage broker page or the overview of commercial mortgages. For the same file in a very different market, our Orlando commercial mortgage guide shows how Florida insurance costs replace rent regulation as the number that decides the loan.
NYC commercial mortgage FAQ
Will lenders finance a rent-stabilized building in NYC?
Yes. Lenders finance stabilized buildings every week in all five boroughs. They underwrite the registered rents and the actual expenses rather than projected increases, and because the Rent Guidelines Board set 0% for leases starting between 1 October 2026 and 30 September 2027, your projection should show flat stabilized rents for that lease year.
How much do I need to put down on a NYC apartment building?
Plan on 20% to 30% of the price, plus closing costs, the mortgage recording tax and reserves. Fannie Mae's small-loan program caps the loan at 80% of value and requires at least 1.25x debt service coverage, and in NYC the coverage test often sets a lower ceiling than the 80% cap does.
What is the mortgage recording tax on a NYC commercial mortgage?
New York State charges a basic tax of 50 cents per $100 of mortgage debt, a special additional tax of 25 cents per $100, and an additional tax of 25 cents per $100, which is 30 cents inside the Metropolitan Commuter Transportation District, and New York City adds $1.00 per $100 on mortgages under $500,000 or $1.75 per $100 on commercial mortgages of $500,000 or more, so the combined rate on a commercial mortgage of $500,000 or more is 2.8%. The Department of Finance directs filers to the ACRIS calculator for the exact amount on a specific mortgage.
Does Local Law 97 affect my financing?
It can. The law covers a building over 25,000 gross square feet, and two or more buildings on one tax lot that together exceed 50,000 gross square feet. Limits began in 2024 and tighten in 2030, so lenders on larger buildings ask what the compliance plan costs and whether you have reserved for it.
Which borough is easiest to finance?
No borough is automatically easier. The Bronx and Brooklyn show the lowest operating costs per unit in the Rent Guidelines Board data, Manhattan shows the highest income per unit, and lenders price the file on the building's own numbers, its stabilized share and your experience. A clean package beats a good address.
Sources
- NYC Rent Guidelines Board, 2026-27 Apartment and Loft Order #58. Adopted 25 June 2026; 0% for one-year and two-year leases commencing 1 October 2026 through 30 September 2027. Checked 23 September 2026.
- NYC Rent Guidelines Board, 2026 Income and Expense Study (26 March 2026). Borough income and operating cost per unit per month, average NOI and share of buildings in distress, 2024 data. Checked 23 September 2026.
- NYC Department of Finance, Definitions of Property Assessment Terms. Tax class definitions, levels of assessment and the 20% phase-in. Checked 23 September 2026.
- NYC Department of Buildings, Local Law 97. Covered buildings and the 2024 and 2030 limits. Checked 23 September 2026.
- New York State Department of Taxation and Finance, Mortgage Recording Tax. Basic, special additional and additional tax rates. Checked 23 September 2026.
- NYC Department of Finance, Mortgage Recording Tax. Calculating the tax due through ACRIS. Checked 23 September 2026.
- New York State Department of Taxation and Finance, Form MT-15, Mortgage Recording Tax Return (rev. 1/25). Table 4: New York City tax of $1.00 per $100 under $500,000 and $1.75 per $100 on other mortgages of $500,000 or more; 2.05% and 2.8% combined. Checked 9 October 2026.
- Fannie Mae Multifamily, Small Mortgage Loan Program Term Sheet. Loan amount, term, maximum LTV and minimum DSCR. Checked 22 September 2026.
- U.S. Department of Housing and Urban Development, Section 207/223(f). Eligibility, term and loan-to-value limits. Checked 22 September 2026.
Michael McGovernFounder, Commercial Mortgage Connection. Michael wrote and reviewed this guide drawing on a career that began at Bear Stearns & Co. in 1997, ran through structuring billions of dollars in CMBS and MBS in Bear's F.A.S.T. group and selling mortgage product at Lehman Brothers, and now spans more than $1 billion in originated mortgages.
Financing a building in the five boroughs? Send us the rent roll.
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Facts on this page were verified against the cited New York City, New York State, Fannie Mae and HUD sources on 23 September 2026. Rent guidelines, tax rules, program limits and lender appetite change, and the example rate and figures on this page are illustrations, not offers or quotes. Nothing on this page is a loan offer, a rate quote, legal or tax advice, or personalized financial advice; all financing is subject to lender approval, credit review and property underwriting, and no approval is guaranteed. Broker licensing and closing rules vary by state. Commercial Mortgage Connection is a commercial mortgage brokerage, is paid when loans close, and sells the service described on this page. Equal Housing Opportunity.
