HUD PEANUT BUTTER
Want to get a jump-start on upcoming deals? Meet the major Boston players at one of our upcoming events!
|At the big mortgage bankers confab in San Diego this week, HUD's Carol Galante compared multifamily and healthcarefinancing (and the slow application process) to peanut butter: ?We've got a big lump in the system, and we've got to find a way to smooth that out.? Consulting firm McKinsey provided productivity tips, so the FHA will now screen projects for feasibility beforeprocessing teams swoop in. Carol warns you'll be held accountable for the quality of your applications; they're not going to rework incomplete or unrealistic deals. ?We need to clear the pipeline for those deals that make sense.? The FHA had record production of $11B in 2010. The only constraint for 2011 is human resources.|
|HUD's Roger Miller (far right) says the Office of Healthcare did twice as many hospital deals in 2010 (nine in September alone) as in '09, at $100M per clip. The office reorganized in June and has achieved equal status with multifamily and single-family, and its principal balance has grown to $26B with more than 2,500portfolio facilities. Section 232 acting director William Lammers(next to Roger) says the average underwriting time is still too long. Steps to speed it up: Applications that fall into set criteria will be processed more quickly than ever. But as in multifamily, underwriters don't have the luxury to rewrite deals that have problems. ?We're going to be sending deals back.?|
|The dreaded Dodd-Frank is something Amerisphere Multifamily Finance CEO Rodrigo Lopez, at the podium, has on his mind. Prudential Mortgage Capital's Dave Twardock points out that GSEs were the only net provider of new capital for multifamily through the bottom of this cycle, and CWCapital's Michael Bermansays there's a ?healthy respect for the roles that the GSEs have played.? He vocalized a clear recognition that anything abruptwould be damaging, but in the long run, Dave says, there are going to be points of the cycle when a lack of GSE capital would cause a severe liquidity issue in multifamily, just like in the other sectors.|
|We also snapped USAA Real Estate executive managing directorBruce Petersen, Tim Stoner, and Austin Reynolds and, in the pink shirt, State Farm Insurance?s Philip Reuter. They're hearing better news at this year's conference and say things are moreupbeat. Bruce, Tim and Austin came from San Antonio and Philip from Bloomington, IL. A developer/investor sitting with an insurance man at a finance conference? We sense a JV coming on.|