Nonbanks seize on new source of funding for multifamily lending

Mortgage

Nonbanks looking to expand in multifamily lending have found a new source of funding in an esoteric (and somewhat tarnished) corner of the mortgage bond market.

Many of these lenders originate large volumes of multifamily loans for the Federal Housing Administration, Freddie Mac and Fannie Mae. They also specialize in what is known as “transitional” lending, or short-term, floating-rate loans on commercial property buildings that are being repurposed or fixed up in order to eventually qualify for cheaper, longer-term financing.

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