- HUD backed 116 loans totaling $2.64B in Q3, up from Q2 but 8% less than the same period last year.
- YTD, HUD has guaranteed 374 loans with a balance of $6.97B, with projections indicating the lowest annual volume in 12 years at $9.3B.
- NY Housing Development Corp. was the most active lender, with a notable $315.17M loan for Hunter’s Point South/Gotham Point in Long Island City.
- Excluding the NYC HDC loan, Greystone Funding Co. was the top HUD lender, leading in healthcare loans with $143.17M in originations.
According to Trepp, the U.S. Department of Housing and Urban Development (HUD) guaranteed 116 multifamily and healthcare loans with a total balance of $2.64B in Q3. While this is higher than in Q2, when 108 loans totaling $1.81B were backed, it’s 8% less than in the same period last year.
To be specific, on a YTD basis, HUD has already guaranteed 374 loans with a balance of $6.97B that support nearly 52K units.
Should the current lending pace continue, HUD’s annual volume is projected to reach $9.3B, the lowest level in at least 12 years. By contrast, the last fiscal year saw 711 loans with a balance of $12.41B.
Noteworthy Lenders
The New York Housing Development Corp. emerged as the most active lender this quarter, originating a $315.17M loan for the construction of Buildings F and G at Hunter’s Point South/Gotham Point in Long Island City in Queens.
This development, spearheaded by Gotham Organization Inc., RiseBoro Community Partnership Inc., and Goldman Sachs Urban Investment Group, includes 1.13K units, with 75% designated as affordable housing.
Excluding the NYC HDC loan, Greystone Funding Co. stood out as the top HUD lender, accounting for nearly 10% of the quarter’s total volume. Greystone also led in healthcare property loans, originating $143.17M, or nearly 19%, of the $761.43M total in this sector.
Diving Deeper
HUD’s 223(f) program, which provides financing for the acquisition or refinancing of existing properties, remains popular. In the latest quarter, 28 loans under this program totaled $588.2M.
Loans in this program must meet debt-service coverage minimums of 1.18x for market-rate properties and 1.15x for affordable properties, with full amortization over 35 years.
The only acquisition loan guaranteed by HUD this quarter was a $6.95M mortgage for the 112-unit Lions Center in Wildwood, NJ, provided through Lument Real Estate Capital. Details regarding the property’s acquisition remain undisclosed.
In Summary
HUD’s multifamily and healthcare lending volumes showed mixed results, but an overall decline YoY. The projected annual volume suggests a significant drop, marking its lowest level in over a decade.
Key players like NYC HDC and Greystone Funding Co. continue to drive significant portions of the lending activity, particularly in the affordable housing and healthcare sectors.
