Greystone’s CEO on Multifamily Lending, Affordability

Stephen Rosenberg, founder & CEO of the company, explains what makes the multifamily debt market so strong and how the firm plans to help reduce the affordable housing shortage.
Stephen Rosenberg, Founder & CEO, Greystone. Image courtesy of Greystone.
Stephen Rosenberg, Founder & CEO, Greystone. Image courtesy of Greystone

“It’s a great time to be a quality sponsor,” Stephen Rosenberg, founder & CEO of Greystone, told Multi-Housing News. In the interview below, Rosenberg details the company’s plans for remaining at the head of multifamily lending pack and for helping solve the affordable housing crisis. 

Rosenberg also reveals how Harmony Housing—the nonprofit he founded to preserve and maintain affordable housing nearing the end of its subsidy period—will explore housing development opportunities.


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What is the key takeaway from 2019 when it comes to multifamily lending in general.

Rosenberg: Despite a cloud of recession fears, 2019 was a banner year of lending volume for Greystone and the industry as a whole. The Mortgage Bankers Association predicted multifamily volume would reach $359 billion in 2019—up 6 percent over 2018.

So, the market for multifamily lending today is extremely strong, and it’s a great time to be a quality sponsor. Never before have there been so many options—and just sheer amounts of capital—available to acquire and refinance quality assets. Despite the ongoing discussion of “when the other shoe may drop,” the industry has barreled along, and Greystone has been thrilled to play a part in it, with expected record origination volume of nearly $13 billion and another year as the number one FHA lender and a top Fannie Mae and Freddie Mac lender.

Greystone has consistently exceeded the $1 billion threshold in loans for small- to mid-sized assets. What can you tell us about this market?

Rosenberg: The small loan market is critical to the housing industry. This is the “middle market,” which supports both affordable, subsidized and market-rate workforce housing that is in demand by so many around the country. We are proud to have been one of the original three pilot participants in Freddie Mac’s Small Balance Loan program in 2014 and have been working with Fannie Mae on this business for many years as well.

Regarding Fannie Mae and Freddie Mac, some financing specialists say that limiting federal involvement in the debt market will limit risk and gradually make housing more affordable. Do you agree?

Rosenberg: Fannie Mae and Freddie Mac’s multifamily businesses have been and continue to be strong and making money for the companies and the government. I don’t see any logic to limiting federal involvement in making housing more affordable. If anything, the more liquid the credit markets are with government participation, the more affordable housing would be.


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The shortage of affordable homes is more problematic than ever. Tell us about your plans in the affordable housing sector.

Rosenberg: We will continue to grow Harmony Housing. The goal is to double the portfolio this year to over 20,000 units. The main mission of Harmony Housing today is to preserve and maintain existing affordable housing nearing the end of its subsidy period, but we are exploring the creation of new housing since we know that there is still a large deficit of affordable housing, and the existing stock is deteriorating.

Another important mission for Harmony Housing is to enhance people’s lives. We provide the foundational housing so that they can focus on their well-being, and the properties offer programs and services that benefit their lives. This is a critical aspect to the Harmony Housing portfolio. While the portfolio grows, the revenues go to acquiring new properties and are also donated to charities globally. It’s a truly magical process that is growing by the minute, and we are excited for continued expansion and impact.

Greystone recently expanded its lending program with offerings in the industrial, office, retail and hospitality sectors. What led to this expansion and what are your plans for the future in this direction?

Rosenberg: Greystone has been a specialist in the multifamily market for three decades, but our value proposition—client service—is certainly applicable to other asset classes. The world is evolving, and the industrial sector is seeing immense growth from the Amazon effect and a need for more logistics hubs, so there will be demand to finance these property types.

What is Greystone’s strategy for 2020?

Rosenberg: Research says that multifamily is one of the strongest asset classes, and we do expect 2020 to be another banner year for volume based on today’s market fundamentals. But while we have been riding the longest economic expansion in U.S. history, we know this can’t last forever, and we are always thinking of ways to prepare and hedge against a potential downturn.

We are extremely diversified in terms of our own credit lines and capital sources, having issued multiple CLOs and worked with institutional investors on funds. It is through these vehicles we have been able to offer innovative products that meet our clients’ changing needs, such as CMBS mezz, or a white-label product that would be highly competitive if the market changes. 

Greystone is also focused on becoming a comprehensive capital provider for the affordable housing sector, and we are continually seeking ways to innovate and expand our offerings for clients. With the acquisition of the general partner of America First Multifamily Investors, Greystone can now provide alternative financing products for clients with tax-exempt financing needs where a traditional agency execution may not be a fit, such as up to 100 percent financing for construction.

Is there anything that you feel will be a challenge in the industry in the next 12 months? Tell us more about it.

Rosenberg: Right now, the market is extremely frothy and awash with capital. While Greystone hasn’t loosened its underwriting standards to compete, there is a concern that risky loans from other lenders may enter the market and defaults could rise, impacting the sector as a whole. Since we sell our loans to Fannie Mae and Freddie Mac or have them insured by HUD, and also service our own $38 billion loan portfolio, we maintain our high credit standards now and always. I think this will be a differentiator for if and when the market shakes out.

How do you see the U.S. multifamily market in the years to come? What are your predictions?

Rosenberg: Over the last 30 years, I have seen several real estate cycles, but there is nothing like the multifamily sector. The demand is certainly always there, and it’s one of the most stable assets for investors. But there is a growing issue of affordability. We are nearing crisis proportions where we have not enough subsidized housing available, and then (we have) market-rate housing that is out of reach for many people.

Currently, no one is focusing on creating housing for the middle market, sometimes referred to as workforce housing. I think there is a huge opportunity for our industry to solve this problem, but it will probably take a public-private partnership to make a large impact. Greystone wants to be involved in solving this problem, whether it is from the lending, investment or advisory side or all three.