Mathew Wambua
Vice chair and head of agency lending at Merchants Capital
At a time when many capital providers are tightening their money belts, affordable housing lender Merchants Capital has been loosening theirs, originating $6.89 billion in loans in 2023 — including more than $1 billion in financing for New York City Housing Authority (NYCHA) projects.
“We are affordable housing finance practitioners. We feel really comfortable with, and deeply knowledgeable about, this sector,” said Mathew Wambua. “It’s a sector for which there is significant unaccommodated demand and counter-cyclicality. When the economy’s booming, people need affordable housing because rents are going up.”
Merchants is a top-ranked agency lender with Fannie Mae, Freddie Mac, and HUD/FHA that also remains active in balance-sheet lending through its parent company, Merchants Bank. The company executed more than $3 billion in securitizations in 2023 and accrued more than $900 million in assets under management.
The company’s NYCHA financing in 2023, intended to support rehabilitation and renovation efforts, included a $348 million mortgage-backed securities loan from Fannie Mae for the rehabilitation of 87 buildings across Brooklyn; a $320 million loan for renovations at Edenwald Houses in the Bronx, the largest NYCHA project in the borough and the state’s second largest; and a $225 million loan for the refinancing and rehabilitation of seven other properties in the Bronx.
Merchants, along with Vium Capital and Atlas SP Partners, also completed a private synthetic securitization of over $1.1 billion of first-lien, floating-rate skilled nursing and senior housing bridge loans.
Along with the affiliation with Merchants Bank, Wambua credits the company’s success to its (relatively) small size and its singular focus.
“We have a suite of cross-pollinating offerings that belies our size, including balance sheet lending, Freddie, Fannie, FHA, secondary market and capital market executions. I think the only other entities you’ll find with that broad set of offerings in the multifamily world are the Citigroups or the Wells Fargos,” he said. “We’re nimble, flat in structure, and devoid of bureaucracy. Those factors, coupled with our expertise and specialization in multifamily affordable housing, [allow us to] unleash a significant amount of creativity.”
