From the Editor
By Neil Pierson
GSE programs are integral
to commercial financing success
The first three months of 2018 likely brought smiles to the faces of many commercial real estate professionals.
According to the Mortgage Bankers Association (MBA), commercial and multifamily loan originations by dollar
volume were up 1 percent year over year as of this past first quarter.
Across the board, loan-origination volumes in the first quarter of 2018 were down 33 percent compared to
fourth-quarter 2017, but MBA chalked that up to the usual lull that accompanies the arrival of the new year.
Depending on the asset classes you specialize in, your start to 2018 may be especially bright.
As of the past first quarter, several sectors saw significant year-over-year gains in loan dollar
volumes, including hotels (up 54 percent), multifamily (up 18 percent) and industrial (up
14 percent). Loan volume for retail and health care properties saw steep year-over-year
declines of 27 percent and 39 percent, respectively, however.
The government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac
continue to make waves in the multifamily sector as their first-quarter 2018 loan
volumes each rose 8 percent compared to first-quarter 2017. And it’s an apt time to
talk about Fannie and Freddie, given our monthly focus for July is on government
loans and the GSEs.
Our lead article from Christopher Hoeffel of CoreVest Finance discusses a potentially
seismic shift in how the GSEs approach single-family rental (SFR) housing. On Page 31,
Hoeffel talks about the GSEs’ recent launches of SFR securitization programs, which aim
to give small and midsize investors — a market that may be worth up to $6 trillion — more
On Page 54, Joshua Reiss of Hunt Mortgage Group writes about an equally timely topic — Freddie
Mac’s Targeted Affordable Housing (TAH) Express program, which commenced this past April. TAH Express is a
useful way for commercial mortgage brokers to help clients obtain up to $10 million in financing for the preservation of multifamily housing in a variety of markets, Reiss writes.
We shift to alternative financing sources on Page 59, where Milton Franklin of Commercial Mortgage Exchange
Inc. offers a big-picture guide to tailored financing within the post-recession economy. The regulatory barriers
that keep many banks out of commercial real estate lending present opportunities for mortgage brokers to
partner with a variety of private and nonconforming lenders, Franklin writes.
On Page 81, Chris Hurn of Fountainhead Commercial Capital also delves into nonbank lenders and their
penchant for specializing in a niche — a boon for the right kind of borrower. Mortgage brokers, who often
are helping business owners with their first commercial property purchases, should know that streamlined
customer service and innovative technology are helping nonbanks stand out from the crowd.
Brokers and borrowers are turning to nonbanks in greater numbers, a trend supported by data gathered at an
MBA convention this past February. Gary Bechtel of Money360, on Page 88, says nonbanks may most effectively
help drive investments in secondary markets like Phoenix and Salt Lake City because of their speed, flexibility
The July issue also includes a glimpse at the niche market of self-storage properties. On Page 44, Billy Meyer of
Columbia Pacific Advisors says an array of community banks, life insurance companies and private lenders are
financing these deals. Brokers should know the self-storage sector is attractive to many lenders because it offers
consistent cash flow and less risk, in general, than other property types, Meyer says.
In the spirit of Independence Day, commercial mortgage brokers can look to assert their independence by
continuing to diversify their business partnerships and financing sources. As the heat rises this month, stay cool
by staying on top of the latest industry trends and opportunities.
Neil Pierson is editor of Scotsman Guide Commercial Edition.
Reach him at (800) 297-6061 or firstname.lastname@example.org.