WEST CHESTER AND PHILADELPHIA, PA—Hunt Mortgage Group has financed two properties in eastern Pennsylvania through its Small Balance Loan program. The total investment of $7.8 million was provided to the same borrower, a multifamily owner based in Philadelphia that Hunt declined to name. 

"The small loan program was one that Freddie Mac did not have, it's really kind of a shared risk program," Bryan Cullen, managing director with Hunt Mortgage Group tells GlobeSt.com exclusively. "There are a limited number of participants because we actually hold the B piece. It puts some skin in the game for us, it allows us to price those things a lot lower, they're not capped by the FHFA limits, and the processing is much more streamlined. We're able to do deals quicker, with less paperwork and provide lower rates."

The two properties financed in Eastern Pennsylvania fall into what Cullen says are "top markets," although Philadelphia has since lost that designation.

"Those rates are 30 basis points inside of what you would offer to every other market, and made it a much superior product to Fannie's small balance loan for the same targets," Cullen says. "So we did a boatload of this business, and this developer had never done one before. The interest rates we were providing were extremely strong compared to the market, so it's been an extremely successful and positive story."

The properties financed are:

• Washington Square Apartments. Hunt Mortgage Group provided $4.8 million loan to facilitate the acquisition of Washington Square Apartments, a mixed-use property located in West Chester, PA. Situated at 21 West Washington Street, Washington Square Apartments is a 29-unit garden-style apartment development consisting of one three-story structure. The building also contains six commercial spaces on the ground floor that are all currently occupied.

• The Printing House.  Located in Philadelphia, The Printing House is a 27-unit property that the borrower purchased in August 2014.  Hunt provided a $3 million to refinance the apartment complex, at 313 Vine Street. The property consists of one five-story apartment building, built in 1899 and renovated in 1999.

"The loans are ten-year fixed-rate transactions with 30-year amortization after a three year interest-only period," says Cullen. "A potential problem was averted as we worked through the process of securing the financing as Freddie was increasing their spreads throughout the process and we needed a timely delivery to grandfather the interest rate. The borrower is a seasoned investor with more than 40 years of multifamily real estate experience but this was his first time using the Freddie Mac program."

Hunt is one of just ten Small Balance Loan (SBL) Lenders for the Freddie Product nationwide. Cullen is positive about opportunities in Philadelphia.

"There's not a neighborhood in the country that we can't figure out," he says. "I've got good brokerage relationships so we're very bullish on lending opportunities in Philadelphia."