Fannie Mae is reported to have stopped buying mortgages for condominiums and co-op apartments at Battery Park City, according to an article at crains.com today by Amanda Fung, that said "as a result it has become almost impossible to sell a condominium or co-op in the waterfront neighborhood in lower Manhattan unless an all-cash buyer swoops in."

The article said that it is unclear why Fannie Mae stopped accepted mortgages in the 92-acre waterfront enclave, but added that "a Fannie Mae spokeswoman said it is currently reviewing terms of the ground lease agreements that exist in Battery Park City to determine whether they 'meet our guidelines.'"

Ground lease fees could double in two years when they expire, it continued.

Richard Martin, a senior vice president of DE Capital Mortgage, told Crain's that "Battery Park City is getting hit hard," adding that "Underwriters consider the area a declining market" and that "since the beginning of the year his company has failed to complete five to six transactions in the neighborhood."

The article cited a letter from an attorney for Denis Timm who was trying to sell a one-bedroom apartment at The Regatta at 21 South End Avenue that his buyer was denied a mortgage by "CitiMortgage and Residential Home Funding Corp. because 'the loan has been declined for failing to meet Fannie Mae guidelines,'" adding that Fannie Mae "has temporarily ceased accepting loans in the Battery Park area while they re-review the ground leases there."

Another broker, Terry Lautin of Prudential Douglas Elliman told Crain's that the only deals going through at Battery Park City were "all-cash" transactions.