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NewPoint, Lender Headed by Ex-Freddie Mac CEO, Buys HHC

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NewPoint Real Estate Capital, an apartment building lender headed by David Brickman, former chief executive officer of Freddie Mac, has acquired Housing & Healthcare Finance LLC, a commercial real estate finance company.

HHC Finance, based in Bethesda, Maryland, focuses on helping to finance nursing homes, apartment buildings catering to seniors, and other facilities. It is combining with NewPoint, which mainly finances apartment buildings with loans guaranteed by the Federal Housing Administration, Brickman told Bloomberg.

HHC Finance founders Erik Lindenauer and Rich Lerner will join NewPoint as co-presidents of its FHA lending unit and lead the integration of HHC’s team of approximately 50 people into NewPoint’s existing business. NewPoint will also absorb HHC’s loan servicing portfolio. An official announcement will be made later on Wednesday.

“Multifamily housing continues to benefit from significant changes in terms of the increased demand for rental housing, coupled with a lack of supply, and demographic trends, such as the growing population of people over 80 years of age and their need for senior housing,” Brickman said in a phone interview. “Multifamily is a hotspot, broadly, in commercial real estate.”

NewPoint estimates that it will make at least $5 billion worth of loans across its businesses in 2022, and more than $10 billion of origination within a few years, Brickman said. In addition to its main agency lending platform, it will also be launching a so-called bridge-to-agency finance program, which it considers non-agency.  The company may consider securitizing its non-agency products down the road, Brickman said.

Brickman was at Freddie Mac for more than 20 years, and resigned effective January.  He launched NewPoint in June, with the firm owned by Meridian Capital Group and money manager Barings, with some additional backing from private equity firm Stone Point Capital. In addition to his role as CEO of the lending platform, Brickman is also executive chairman of Meridian and a senior adviser to Stone Point.

In the last decade, HHC Finance has made approximately $7 billion of loans backed by the U.S. Department of Housing and Urban Development, the parent of FHA. It spun off from CapitalSource in 2008. “The demand for senior housing and assisted living is off the charts as the over-80 demographic continues to grow as part of the Baby Boom glide path,” HHC’s Richard Lerner said in an interview. “It’s growing so fast that the market may not be able to keep up.”

Securities backed by multifamily mortgages largely held up during the pandemic, unlike other commercial mortgages such as those for retailers and hotels. CMBS loans linked to multifamily properties had relatively low delinquency rates over the last year compared to lodging and retail loans.

Multifamily delinquencies within CMBS had a delinquency rate of 1.90% in November, down from 3.11% one year ago, according to a recent report from commercial real estate data company Trepp. By comparison, hotel mortgages in CMBS had a delinquency rate of 9.40%, down from 19.66% in November 2020, Trepp said.

–With assistance from Gillian Tan.

To contact the reporter on this story:

Adam Tempkin in New York at atempkin2@bloomberg.net

To contact the editors responsible for this story:

Nikolaj Gammeltoft at ngammeltoft@bloomberg.net Dan Wilchins