CWCapital will soon open a low-income housing tax credit (LIHTC) syndication business, Affordable Housing Finance has learned.
The firm has hired industry veterans Justin Ginsberg and Andrew Weil to help run the program. Most recently, Ginsberg had been senior managing director and Weil had been executive managing director of the affordable housing group at Centerline. Ginsberg and Weil will be based in New York City.
The new platform will mark CWCapital’s entrance into the LIHTC equity syndication space while also serving as a complement to its existing affordable housing debt programs. The company is part of Freddie Mac’s Targeted Affordable Housing network, as well as Fannie Mae’s affordable network, and is also a Federal Housing Administration (FHA) lender.
“The low-income housing business is something that we at CW have been interested in for a long time, and we’ve looked at a number of different ways to get into the business,” said Don King, managing director of government-sponsored enterprise production at CWCapital. “We’ve looked at acquiring businesses to get in, and then we had this wonderful opportunity to bring in two very experienced senior executives to help us grow it organically.”
CWCapital is one of the top agency lenders in the nation. Last year, it was the fifth-most active Fannie Mae lender ($1.1 billion), the fifth-most active FHA lender ($925 million), and the eighth-biggest Freddie Mac lender ($691 million), according to the Mortgage Bankers Association. And the firm will surpass those figures this year, having closed $1.8 billion in agency loans through the first seven months of 2011.
While the LIHTC equity program is still in its early stages at CWCapital, its addition should help the company grow its affordable housing debt volume going forward.
“We do expect a decent increase in affordable debt production going forward as a result of adding the equity business,” said King. “Our view is that affordable housing will always be a significant part of whatever housing solution we have going forward, and most likely Fannie and Freddie will be, in some form or another, involved over a long period of time. We’re very long on the business.”
Centerline’s affordable housing group has seen a lot of turnover recently. Managing Director Ryan Sfreddo left the firm about five months ago to join Red Stone Equity Partners, and another managing director, Ronne Thielen, has also left the company. The firm recently hired Michael Riechman, formerly managing director of tax credit investments for RBC Capital Markets, as its head of affordable housing. And Centerline brought on Phil Melton, who most recently ran the FHA platform for Grandbridge, as its director of affordable housing debt.