NewPoint Real Estate Capital and Morgan Properties have joined forces to offer a suite of products aimed at filling in gaps in the current array of affordable housing finance products. The platform of products they have developed is called NewPoint Impact and it pairs private capital with government-subsidized products to address current needs in this ecosystem, such as new construction or renovation before a project is stabilized, or a bridge to syndication for a tax credit.
Creating products for these scenarios is complex, David Brickman, CEO of NewPoint, tells GlobeSt.com. “You have an intersection of the tax credit program, tax exempt bond financing and municipal finance. It is not just conventional CRE finance.”
Ultimately, Jason Morgan, principal and president of Morgan Properties Special Situations, tells GlobeSt.com “we are attempting to solve a need and promote the development and redevelopment of affordable housing in this country.”
The duo say they expect the platform can finance up to $1 billion in affordable initiatives over next year. “We expect to increase that amount over the years to come,” Brickman says.
NewPoint’s Rob Wrzosek, who was recently elevated to President – Affordable Strategies, will lead the initiative.
Financing amounts start at $8 million and are available to both for-profit and non-profit 501(c)(3) developers, with terms ranging from 2 to 40 years, depending on the execution. The products they are offering include:
- NewPoint Impact 4% Tax-Exempt Bond Financing. NewPoint Impact will provide both construction and/or acquisition/rehabilitation, as well as permanent financing in conjunction with the 4% LIHTC program.
- NewPoint Impact 4% Fannie Mae M.TEBs. NewPoint Impact will provide construction or acquisition/rehabilitation financing through a municipal bond product while Fannie Mae writes an unfunded forward commitment for permanent financing pursuant to its MBS as Tax-Exempt Bond Collateral (M.TEB) execution.
- NewPoint Impact Synthetic 221(d)(4). NewPoint Impact will provide construction or acquisition/rehabilitation financing, and, upon conversion, NewPoint Impact will underwrite FHA 223(f) permanent financing.
- NewPoint Impact Resyndication Bridge Loan. NewPoint Impact will provide bridge loans for the acquisition or refinancing of affordable housing being repositioned for a recapitalization with 4% LIHTCs, with permanent financing expected to be provided by NewPoint Real Estate Capital.
There will be different flavors of these products depending on whether the deal has a Fannie Mae, Freddie Mac or HUD exit, Brickman notes.
The two companies have had preliminary conversations with friends and clients about the offering, but its formal debut is Monday, August 8th. “We see a tremendous amount of demand for this product and we have the ability to scale with that demand,” Morgan says.
– By Erika Morphy, originally published on GlobeSt.com
– August 8, 2022 at 8:19 AM