W&D Launches $850M Large Loan Bridge Program

WASHINGTON, DC-Walker & Dunlop has launched a large loan bridge program as part of its many initiatives to diversify its lending operations. The program will have $850 million in lending power, including leverage, and will focus on loans $30 million and above with loan terms of up to three years. Multifamily properties, including student, manufactured and seniors housing, will be the target. Walker & Dunlop will originate adjustable rate loans on multifamily properties that do not qualify for permanent financing but could be candidates via Fannie Mae, Freddie Mac, HUD, CMBS, or a life company once the property is stabilized or repositioned.

The program is being seeded with capital from a Canadian institutional investor, a U.S. real estate investment manager and Walker & Dunlop, which is investing 5% in the program. Walker & Dunlop will receive an asset management fee for managing the program and servicing the loans.

Separately, Walker & Dunlop has announced strong earnings for the second quarter, driving in large part by an origination volume -- $2.6 billion -- that has rise 91% over the same period last year. The company also posted total revenues of $90.7 million, up 94% over second quarter 2012.

There are some concerns for the company, as CEO Willy Walker said in a prepared statement. He notes that Fannie Mae became somewhat more selective during the quarter as it adjusted to its new lending cap; however, Walker continued, "we had record origination volumes and very robust growth of 176% with Freddie Mac."

The company also scaled back its origination guidance for 2013. When it first issued it, the company didn't realize HUD would run out of commitment authority or that FHFA would impose a 10% reduction on the GSE's 2013 multifamily lending volumes, Walker said. "Given these changes, we are revising annual origination guidance from $10 to $12 billion to $9 to $11 billion, and we are establishing third quarter 2013 origination guidance of $2.0 to $2.5 billion."