Berkadia reported strong affordable housing lending activity in the first half of the year, including securing financing under its recently launched private placement program.
The firm surpassed $1 billion in lending volume across 82 transactions in the first five months, a sharp increase from the prior year, according to David Leopold, executive vice president and head of affordable housing.
“We are proud to have built such strong momentum thus far, especially in today’s volatile market,” he says. “In the current landscape, investors are increasingly prioritizing stability and long-term value, and affordable housing has consistently proven to be a stable sector. This, coupled with the growing need for affordable housing across the country, has enabled us to capitalize on opportunities and achieve this remarkable milestone.”
The team recently closed a deal under the new Berkadia Private Placement program, a construction-to-permanent financing solution for affordable housing projects utilizing tax-exempt bonds. Senior managing director Tim Leonhard secured about $132 million in construction loan proceeds for JPI to develop a 461-unit property in Denton, Texas. Half of the units will be set aside for families earning up to 80% of the area median income. Upon completion, the community will be owned by the Denton Housing Authority.
Berkadia Affordable Housing is a fully integrated financial services platform comprised of mortgage banking, investment sales, and low-income housing tax credit (LIHTC) syndication. The firm was recently recognized as the No. 1 Freddie Mac lender by volume and the No. 2 Fannie Mae Delegated Underwriting and Servicing lender by volume in 2024.
Looking ahead to the rest of the year, Leopold is monitoring a number of trends.
“Generally, we are seeing that the majority of the buyers in the space are mission-driven and focused on affordability,” he says. “Well-located, well-maintained affordable assets are attracting strong interest. Cap rates have been rising, which is expected, given increased interest rates, but that is across all asset types and not specific to affordable housing. Additionally, the investor appetite for LIHTC investing continues to be strong. Given the uncertainty in the market, investors are more focused on the financial strength of the developers/sponsors. Investors are looking for information on the developer’s experience, track record, and financial capacity earlier in their review process.”
