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The State of New York Mortgage Agency and the U.S. Department of Housing and Urban Development have signed an agreement which could lead to construction of 2,300 new rental units statewide within the next five years.

HUD, recognizing SONYMA's experience in evaluating multifamily development credit risk and managing a portfolio of multifamily mortgages, will reinsure loans underwritten to SONYMA's standards for up to 2,300 rental units.

In addition, if a claim is filed, HUD has agreed to reinsure up to 50 percent of SONYMA's risk associated with the loans. This marks the first time HUD has signed such a reinsurance pact with a state housing agency.

"We are very pleased to have entered into this precedent-setting agreement with HUD because it ultimately will help thousands of lower- and moderate-income New Yorkers move into quality affordable rental housing, Gov. Pataki said.

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