Lenders' Rent-Stabilized Disappearing Act, By The Numbers

New York Community Bancorp was once one of the most important financial backstops to some of the most vulnerable housing in New York City, lending nearly $3.9B annually to owners of rent-stabilized apartments. 

But the bank, which has since rebranded as Flagstar Bank, has all but vanished from the sector. Last year, it handed out just $58M of new debt to rent-stabilized buildings, according to data provided to Bisnow by credit intelligence platform Atrium Data.

“To mitigate our exposure to rent-regulated properties, we are curtailing future originations of loans secured by rent-regulated properties,” Flagstar said in a May 2025 regulatory filing. “We are no longer utilizing mortgage brokers to refer loan origination opportunities to us.”

Flagstar's retreat, along with the 2023 collapse of Signature Bank, has left a chasm in the lending market for thousands of multifamily owners, who have increasingly found themselves upside down on their mortgages, looking for any way to refinance or, at least, buy time. 

Lenders financed $27.6B of mortgages in 2019 across more than 3,700 deals covering buildings where at least half of the units are regulated, according to Atrium’s analysis. Last year, that total was less than $11.3B spread across approximately 1,400 originations. 

Overall, lending to rent-stabilized properties fell 74% following Signature Bank's failure, according to Atrium's analysis, which covers more than 16,600 unique loans totaling $114B over the past six years. The dataset includes buildings built before 1974 and regulated under the Rent Stabilization Law, as well as those that have benefited from tax incentives such as 421-a, 421-g, J-51 and Article 11, and have stabilized units as a result. 

Even at less than half of 2019’s total, last year was an improvement after two years of steep declines. New lending fell 62% to $7.2B in 2023, the year of the banking crisis, then dropped another 35% to $4.7B in 2024. 

Low interest rates, spurred by the pandemic, helped fuel deals prior to 2023, despite a change in the way the buildings were valued. The Housing Stability and Tenant Protection Act of 2019 cut off avenues for landlords to raise rents or deregulate apartments — possibilities that lenders used to price their loans.

“If you've owned a multifamily building and you were at 75% to 80% leverage before HSTPA, you're [under]water now,” Rosenberg & Estis Transactional Department Leader Eric Orenstein said. “So start with the premise that unless you're going to infuse capital, there's nobody who's making a loan to you.”

On average, buildings that are majority-rent-stabilized have lost 40% of value since 2019, according to Ariel Property Advisors’ year-end market report.

The collapse of Signature Bank, a dominating player in the space, was another destabilizing moment in the market. The bank originated $7.4B in loans between 2019 and 2023. Its book of loans backed by rent-stabilized properties was later sold for pennies on the dollar. 

Flagstar narrowly managed to avoid collapsing in 2024, and its turnaround effort has focused on purging its loan books to reduce its rent-stabilized exposure, paving the way for its return to profitability.

As of the end of 2025, the bank held $14.6B of loans tied to New York City’s rent-regulated market, according to the company’s quarterly report. More than $9B in loans were backed by buildings where at least half of the units were regulated.

The need for new financing has grown increasingly dire. The average rent-stabilized loan age was above five years as of 2024, the most recent data available, according to a Maverick Real Estate Partners report.

There was approximately $131B of outstanding debt tied to 852,000 residential units — 665,000 of which were stabilized — according to Maverick’s report, published in May 2025. Approximately 220,000 stabilized units are in buildings that are free of mortgage debt. 

Few lenders have stepped in to fill the gap, largely because distress has shot up in the sector.

The delinquency rate of securitized loans tied to NYC apartment buildings built before 1974, which house the most rent-stabilized stock, was 3.7% in October 2023, according to Trepp. Two years later, 11.5% of those loans were delinquent.

Meanwhile, NYC market-rate delinquency was still below 0.6% as of last fall, and market rents continue to climb. 

Webster Bank is among the few lenders that have increased their activity in the space. In 2024, Webster funded roughly $82M across 17 deals. In 2025, that doubled to about $168M over 12 loans.

The bank merged with Sterling National Bank in early 2022. Combined, the two institutions have originated $1.9B in loans backed by rent-stabilized properties since 2019, according to Atrium.

Overall, big banks have become the most active among lender types, though their absolute volumes have fallen, too. JPMorgan Chase, Wells Fargo, Citibank and Goldman Sachs collectively increased their market share from 20% in 2019 to 41% in 2025.

Between 2019 and 2022, JPMorgan was the second-largest lender on rent-stabilized property, behind NYCB, with an annual average of $2.4B of rent-stabilized originations. Since 2023, it has handed out just $670M annually to the properties tracked by Atrium. 

Wells Fargo is among the only lenders that lent more on rent-stabilized properties in recent years. It has provided an average of $1.3B per year since 2023, up from $610M between 2019 and 2022. 

But the liquidity isn’t necessarily a comeback, according to Atrium. A handful of huge refinancings accounted for a large amount of new debt throughout the market. 

Chief among them is Wells Fargo’s $3.15B mortgage to Blackstone for Stuyvesant Town and Peter Cooper Village, two housing projects with roughly 11,250 units. The massive deal accounted for a large chunk of Wells Fargo’s financing average and 2025's total.

Across the commercial real estate industry, debt funds and other alternative lenders have become a major source of capital as banks have had to restructure their books and shore up reserves post-pandemic. Across all of commercial real estate, alternative lenders accounted for 40% of loan closings by nonagency lenders in the fourth quarter, according to CBRE.

But alternative lenders are largely dodging New York City’s rent-stabilized housing. Nonbank institutions, including insurers, REITs, debt funds and government groups, were responsible for $4.8B of 2025’s loan volume, down from approximately $8.7B in 2019.

Some private equity players have begun buying debt in an effort to foreclose on the properties rather than buying the assets directly. The strategy works if the properties lose enough value. 

Orenstein, who advises lenders largely in the private equity space, said capital is more difficult to access for landlords with violations. As landlords fall deeper into financial distress, especially if there is a rent freeze, building maintenance becomes increasingly demanding.

“Yes, there is a market correction because values have decreased because of the legislation, and also continuing fear of what could potentially happen in the new environment that we're entering into,” Orenstein said. “But the reality is, if you're running in accordance with law the best you can and you're not overlevered, there are lenders who will lend to you.”