Sims Mortgage Funding Quarter-Year Review

Sims Mortgage Funding (SMF) had a busy first quarter of 2019, as it added a new team member in late January and participated in national and regional lender conferences in February and March.

Meet the New Guy

Jonathan “Johnny” Sears joined SMF in January.  He has close to a decade of mortgage banking experience, including seven years working with Government Sponsored Enterprises (GSEs) and HUD multifamily programs.  Prior to joining SMF, Johnny assisted in the origination and underwriting of over $150 million in FHA-insured multifamily loans for affordable and Low Income Housing Tax Credit (LIHTC) projects at Bank of America/Merrill Lynch.

Conference Roundup – What Up With HUD?

The Mortgage Bankers Association 2019 Commercial Real Estate Finance (CREF) Conference and Eastern Lenders Association (ELA) Annual Meeting were held in February and March in San Diego and Baltimore respectively.  Anthony Luzzi, President of SMF, pulled rank and attended the San Diego conference; the trio of Kerrie Tomasiewicz, Andrew Patykula and Johnny Sears went to Baltimore. Senior HUD Executives presented at both conferences to discuss the state of the multifamily mortgage insurance programs.

Key take-aways:

  • HUD’s loan volume for new construction and substantial rehabilitation has been consistently growing over the past three years.  In 2016, HUD insured about $3.7 billion for these loans; by 2017, volume increased to $5.4 billion in 2017 and last year it increased to $6 billion.
  • Low Income Housing Tax Credit (LIHTC) transactions have remained consistent over the last three years at about 33% of HUD’s multifamily business.  This likely has been the result of HUD’s successful LIHTC pilot program for Section 223(f) insured loans for acquisitions and refinances.
  • HUD’s overall timeframes have been improving.  Yes, we said it!  Last year, HUD averaged 77 days for its reviews of Section 223(f) multifamily refinance and acquisition loans and 104 days for its review of Section 221(d)(4) new construction and substantial rehabilitation loans.  These timeframes are likely to continue to improve in the future as HUD intends to hire additional staff.  Our recent experience with Section 223(f) has been better than the average.
  • Current multifamily policy initiatives for 2019 include the “Single Underwriter Model” Best Practices; a revised Multifamily Accelerated Processing (MAP) Guide; financing projects in Opportunity Zones; and, improving the Closing Process and Environmental Reviews.

Stay tuned for future updates on these initiatives, as they have the potential to expand HUD’s business and make HUD-insured loans even more competitive in the future.