SOME of the buyers who thought they would be moving into new condominiums in the region this year are finding that those plans are in ruins as they are being forced to walk away from the hefty down payments they made a year or more ago.

James Estrin/The New York Times

HIGH AND DRY James and Elizabeth Pham with Evan and Lauren. Unable to secure a mortgage, the Phams lost their $93,199 deposit on an apartment in Hoboken, N.J.

They can’t complete their deals because the mortgages they lined up before the credit crisis took hold have evaporated and they can no longer get financing.

Elizabeth and James Pham put all their savings into the deposit they made on a $956,990 two-bedroom apartment at Maxwell Place, a new development in Hoboken, N.J.

They signed an agreement for the apartment in 2005, put down $93,199 and were preapproved for a mortgage for the rest of the purchase price.

But when their closing date arrived last September, several banks told them that to get a mortgage, they would have to increase their 10 percent down payment by another 15 to 25 percentage points. With no way to come up with that much money, the Phams notified the developer, Toll Brothers, that they could not get financing for the apartment. Toll Brothers declared them in default and kept their deposit.

“It would take us another 15 years to save that money again,” Ms. Pham said.

The Phams, who have two children, a 4-month-old and a 2 ½-year-old, live in a two-bedroom in Hoboken that is smaller than the one they had hoped to move into in Maxwell Place. But they borrowed on their equity there to help put together the deposit on the new apartment. The rest of the deposit came from Mr. Pham’s work as a real estate agent, income that has all but dried up in the current market.

“If we tried to sell our apartment, we wouldn’t make enough to cover the cost of selling it, so we’re really stuck,” said Ms. Pham, who works as a benefits manager at a professional services firm. Ms. Pham said that the developer “made no attempt to work with us; they wouldn’t even return my phone calls.” She added that the sales manager had declined their offer to help find another buyer for the apartment and had told Ms. Pham that “not getting our deposit back was just business.”

A spokeswoman for Toll Brothers declined to comment because the Phams have filed a lawsuit to try to get their money back.

Brokers and developers say that every new development probably has a handful of buyers who are facing this difficulty. (The Web site Streeteasy.com lists 460 new developments with active sales listings in Manhattan and 438 in Brooklyn.)

Some who signed contracts have forfeited their deposits. Others have tried to renegotiate their contracts to reduce the purchase price. Some have scrambled to find money to increase their down payments so they can get financing. And still others have downsized to a smaller apartment in order to qualify for a smaller mortgage. These are their options, because until late last year, virtually all developers required buyers to sign noncontingent contracts committing the buyers to the property regardless of whether they could get financing.

The number of people defaulting on contracts at new developments will probably increase in coming months, said Jonathan J. Miller, the president of Miller Samuel, a Manhattan research and appraisal company.

“Initially people were walking away from deposits because they were spooked by the market, but now it’s for more pragmatic reasons — either job loss or difficulty getting financing,” Mr. Miller said. “It’s going to get worse before it gets better, because it will only start to ease when credit stabilizes.”

Alan Rosenbaum, the chief executive of the GuardHill Financial Corporation, a mortgage broker in Manhattan, said that for people buying in new construction, bank “guidelines could not have changed at a worse time.”

For conforming loans in New York City — ones below $729,750 — banks generally are now requiring at least 20 percent down. For jumbo loans of more than $729,750, Mr. Rosenbaum said, lenders are requiring down payments of 20 to 50 percent.

So, for a $1.12 million apartment — the median sales price for condos in Manhattan at the end of last year — a buyer who put down a 10 percent deposit of $112,000 about a year ago, now must come up with an additional $112,000 to $448,000 just to get a mortgage.

In September, Dr. Martin M. Beitler and his partner, Jeff Bretl, had to forfeit a $173,000 deposit on a $1.73 million two-bedroom apartment at Chelsea Modern, a new condo tower on West 18th Street.

They had signed a contract for the condo early last year, but when their closing date arrived, mortgage brokers told them that 90 percent financing no longer existed and that at best, even with impeccable credit, they might qualify for a no-income-check mortgage of $1 million. Unable to come up with the additional down payment that banks were requiring, they reluctantly walked away from the deposit. They are now suing the developer to try to recover some of that money.

“That’s a lot of money that we can’t afford to lose,” Dr. Beitler said. “It’s just so unfair that with all the bailouts and other stuff going on there’s no relief for people in our position. And we didn’t do anything wrong — an unfortunate confluence of events is causing us to have this misery.”

Dr. Beitler, an internist in Manhattan, said he had bought and sold property before and had always qualified for no-income-check mortgages.

Dr. Beitler and Mr. Bretl, who is an advertising consultant, were not the only buyers at the 47-unit Chelsea Modern to have trouble meeting the more stringent mortgage requirements that banks have instituted in recent months.

Robert Gladstone, the chief executive officer of Madison Equities and the developer of Chelsea Modern, said that four other buyers who had qualified for mortgages when they signed their contracts also could not get financing.

“We felt that this was through no fault of their own, so we offered them 20 percent of their deposit back, even though we had no requirement to do so,” Mr. Gladstone said in a statement. “For the most part, everyone was sadly satisfied with the return of 20 percent, given that they had no expectation that they would receive anything back.”

He said that Dr. Beitler and Mr. Bretl were the only buyers suing to get back their entire deposit.

Like many New Yorkers, Louis Andriopoulos figured in 2007 that buying real estate would be much safer than investing in the stock market. He decided to buy a two-bedroom at Fifth on the Park, a new condo tower in Harlem at Fifth Avenue and 120th Street. Mr. Andriopoulos, the owner of a delicatessen on the Upper West Side who lives in Queens, hoped to rent the apartment out for a while and someday sell it for a nice profit.

He put down a $100,000 deposit for a $995,000 apartment in summer 2007, and was approved for a no-income-check 90 percent mortgage. But he lost that approval as credit tightened and in recent months was told by five different mortgage brokers that he would need to increase his down payment to 30 percent to get a mortgage.

“If I knew this, I would never buy this apartment,” he said. “Ten percent used to be more than enough and I never had a problem with financing before.”

The 160-unit building is almost completed and the developer hopes to start closing contracts next month. When his closing date arrives, Mr. Andriopoulos expects to forfeit his deposit. “There’s nothing else I can do,” he said.

Out of 98 contracts at Fifth on the Park, about 10 buyers have already notified the building that they are having trouble with financing, said Lewis Futterman, a co-developer of the property. “But I think we may be able to salvage all but three or four of those sales,” he said, adding that the development has been working with banks and buyers to keep deals alive.

He said he and his partners were willing to offer second mortgages of 5 to 10 percent of the purchase price to help buyers secure their primary mortgages. But finding banks willing to make 80 to 85 percent mortgages to those buyers can be tricky.

“It’s not finalized yet,” Mr. Futterman said, “but we’ve talked to a couple of banks that have said they would consider that kind of program. If banks loosened up a bit, that would help us with our buyers and it would help us pull a lot of potential buyers out of the woodpile.”

Even people who work in the real estate industry have found themselves caught in the predicament. Mr. Andriopoulos’s broker, Jill Sloane, an executive vice president at Halstead Property, is in contract to buy a $1.4 million two-bedroom at the Harrison, a 132-unit development on the Upper West Side where closings are expected in August or September.

“I’m hoping it’s later rather than sooner,” Ms. Sloane said, “because I need to figure out how to make it work financially. All I can hope is the spring market is going to be crazy busy.”

She has already put the required 20 percent deposit down on the apartment, but has been told by her bank that she will have to come up with another $140,000 to get a mortgage.

“If I had a crystal ball for this year’s situation back in December 2007, I would have definitely thought twice about buying this apartment,” she said. “But back then, nobody believed that this could happen to the market.”

For some buyers, the only way to save their deposit is to trade down.

Last fall, Scott Leith and his partner, Paulo Siqueira, faced losing a $170,000 deposit on a two-bedroom apartment at the Chelsea Stratus on West 24th Street.

Mr. Leith and Mr. Siqueira both work in the fashion industry. Mr. Leith said they tried several alternatives before they decided to walk away from the two-bedroom and instead buy a $1.185 million one-bedroom at the Stratus.

They considered filing a complaint with the attorney general to recoup their deposit, but were told that at best they might get half of their money back. They tried renegotiating the price, but the developer offered a discount of only about 5 percent. They asked if the developer would lend them the $250,000 they needed to increase their down payment, but the answer was no, Mr. Leith said.

By downsizing, Mr. Leith and Mr. Siqueira held on to their deposit, but instead of becoming homeowners, they are now investors who plan to rent out the apartment.

“At the end of the day, the only thing we could do was switch to a smaller unit,” Mr. Leith said. “It’s not what we really wanted to do, but we absolutely did not want to lose the savings that we worked so hard for.

“We can only hope that even with the current market, this makes sense as a long-term investment.”

www.nytimes.com/2009/03/22/realestate/22cov.html