HUD

To our valued customers, Since opening our doors in 1990, the Merchants Capital team has worked tirelessly to become nationally recognized as a leader and premier provider and servicer of multifamily, senior and student housing. Recently, our hard work and commitment was recognized by Affordable Housing Finance. We’re proud to announce that Merchants Capital was named in the Top 10 Affordable Housing Lenders of 2018!This accomplishment is evidence of our commitment to advancing affordable housing nationally and ranks us among the top affordable lenders in the country. In 2018 alone, our originations team closed 207 loans and generated nearly $2.6 billion in new loan production nationwide.  That included $1.10 billion in affordable housing, demonstrating a 146 percent increase in affordable housing production compared to 2017. Over the past 28 years, Merchants Capital has originated and closed more than $13.8 billion in loans. Thank you for your continued support and loyalty. We wouldn’t be where we are today without your commitment to Merchants Capital. Sincerely, Michael R. Dury, President, Merchants Capital WE ARE MERCHANTS CAPITAL A Multifamily, Affordable, and Healthcare Lender offering a direct way to access fixed rate, long-term, non-recourse financing via our bank, Merchants Bank, all with a single point of contact.

Carmel, INDIANA (08/15/2017) – Carmel Indiana based PR Mortgage & Investments (PR) is pleased to announce the closing of its acquisition of RICHMAC Funding LLC (RICHMAC), a national Freddie Mac Targeted Affordable Housing Seller/Servicer, Fannie Mae Multifamily Affordable Housing Lender, approved FHA multifamily lender and Ginnie Mae issuer. The seller was an affiliate of The Richman Group. “The RICHMAC platform gives our existing customer base access to Freddie Mac and Fannie Mae, which complements our existing FHA lending platform. Furthermore, RICHMAC and its customers, which include some of the country’s largest apartment owners, will now have support from PR and its parent company, Merchants Bank of Indiana (MBI). MBI will be providing conventional construction and/or bridge loan products that enhance RICHMAC’s permanent loan products. This acquisition solidifies our commitment to affordable housing and gives the MBI family of companies a full array of affordable housing debt products with FHA, Freddie Mac, Fannie Mae, and conventional bank financing.” said Michael Dury, Executive Vice President and COO of PR Mortgage & Investments. RICHMAC will continue to be led by Mathew Wambua and Marsha Goff from offices in New York and Minneapolis. “We welcome Mathew and Marsha and their staff and look forward to working with our existing and new customers in providing expanded and innovative loan products,” added Dury. Beekman Advisors served as strategic advisor to RICHMAC in the transaction and assisted with securing transaction approvals. Wooden & McLaughlin LLP and Ballard Spahr LLP served as legal counsel to PR and RICHMAC, respectively. PR Mortgage & Investments was established in August of 1990 as a mortgage banking firm specializing in multifamily housing and health care facilities finance in the Midwest.  PR is a premier provider and servicer of Multifamily, Senior, and Student Housing. PR is an approved FHA Mortgagee and is an approved Multifamily Accelerated Processing (MAP) lender for HUD. PR is a wholly owned subsidiary of Merchants Bank of Indiana. Merchants Bank of Indiana is headquartered in Carmel Indiana and focuses on several aspects of mortgage lending, agricultural lending, and retail banking services from four Central Indiana locations. Merchants Bank of Indiana has over $3 billion in assets, 165 employees, and more than 100 shareholders. To learn more about Merchants Bank of Indiana, visit www.merchantsbankofindiana.com.

Rising construction costs and increased trade values of sales have made large loans a regular occurrence of PR Mortgage customers.  What constitutes a “large” loan you might ask?  HUD considers a large loan to be over $40 million for new construction/sub-rehab and over $50 million for refinance/acquisition loans.  HUD has created specific underwriting criteria for the large loans with regard to Loan to Cost, Debt Service Coverage, and Initial Operating Deficit Reserves with respect to new construction loans.  HUD has also created Loan to Value and Debt Service Coverage requirements for the refinance/acquisitions loans.  The intent of HUD policy is to reduce the risk of these large loans by increasing the thresholds of these categories. For example: a $60 million dollar market rate new construction/sub-rehab project would require a 1.25 DSCR and 80% LTC vs the under $40 million policy of 1.20 DSCR and 83.3% LTC.  The same method applies to Tax Credit Deals however a tax credit deal at $60 million would be limited to 1.20 DSCR and 85% LTC vs the sub $40 million policy of 1.15 DSCR and 87% LTC respectively. Refinance and acquisition loans behave in a similar way.  A $60 million refinance/acquisition would be limited to 1.25 DSCR and 80% LTV (75% if Cash Out) vs the below $50 million policy of 1.20 DSCR and 83.3% LTV (80% if Cash Out).  A $60 million refinance/acquisition of an affordable project would be limited to 1.20 DSCR and 83.3% LTV (75% if Cash Out) vs the below $50 million policy of 1.176 DSCR and 85% LTV (80% if Cash Out).  Additional thresholds apply to loans above $75 million. We have had great success with borrowers combining phased projects or building in high cost areas with these HUD programs.  Ask your PR Originator about your large loan today!  originations@prmic.com

The HUD Multifamily Transformation for Tomorrow is a two-and-a-half to three year transition process of consolidating HUDs diversely sized eighty field offices into a streamlined model of five HUBs with Satellite offices to support the HUB’s.  The new HUB’s are located in New York (Northeast Region), Atlanta (Southeast Region), Chicago (Midwest Region), Fort Worth (Southwest Region), and San Francisco (West Region) while the Satellite offices are to be located in Boston, Baltimore, Jacksonville, Detroit, Minneapolis, Kansas City, and Denver. The goals of this model for HUD is streamlining the organizational model, producing better functionality out of their workload sharing model, employing a single underwriter model and risk based processing model for production, and employing the account executive model in asset management.  HUD believes this transformation will help them improve efficiency both in their processing timing and reducing their cost by downsizing their geographical footprint of brick and mortar field offices. At this time we are about a year and a half into the transformation process and currently the transformation and training processes are complete for the Southwest and the Midwest regions.  The process is well underway currently in the Southeast Region.  The Southeast Region is projected to be completed in mid-October of 2015.  That leaves the Northeast and the Western regions to be completed in 2016 as the final two waves.  The Northeast is to begin the process in late 2015 and should finish sometime in the second quarter of 2016.  The Western Region will begin its process mid-year 2016 and hopefully finish prior to the end of 2016. As a heavy user of the FHA programs, PR Mortgage & Investments can report that for offices that have already gone through the transformation and training processes, we are already seeing improvements in processing which translates directly to quicker response time and quicker issuance of commitments.