Government-backed mortgage buyers Fannie Mae and Freddie Mac have restricted financing for New York City’s rent-regulated buildings following Mayor Zohran Mamdani’s rent freeze, The City reported Nov. 2. The changes threaten to make refinancing harder for struggling owners and increase subsidy needs for some affordable housing developments.

According to the report, Fannie Mae’s underwriting now assumes no rent increases for stabilized apartments over four to eight years. That is a lending assumption covering Mamdani’s current term and a possible second term—not an established duration for the freeze. Freddie Mac has paused new loans while evaluating the policy’s effects.

The City said landlords, housing advocates and nonprofit executives confirmed the tighter standards; some spoke anonymously because they feared retaliation. Fannie Mae did not respond to the outlet’s request for comment. Freddie Mac said it adjusts lending in response to market conditions.

The financing squeeze reflects more than frozen rents. Lenders are budgeting for rising expenses and greater unpaid rent while requiring owners to contribute more equity. Those assumptions reduce how much a building can borrow, potentially leaving owners unable to replace mortgages when they mature.

Rafael Cestero, CEO of Community Housing Preservation Corp., said his organization expects to make half as many loans to entirely affordable New York City projects as it did two years earlier. Its calculations include a 10% loss in rent collections, four years without rent increases and annual expense growth of 5% for projects nearing completion.

The pressure is uneven. The City reported that buildings mixing market-rate and regulated apartments remain financially stronger, while longtime owners with relatively little debt can still obtain financing.

Deputy Mayor for Housing and Planning Leila Bozorg said the city would work with financing partners. She also pointed to efforts to lower insurance and development costs and introduce financing tools, most still being planned or in early rollout.