Sector-Defining Partnership of Nonprofit Companies Bring Social Responsibility Lens to Mortgage Lending With Focus on Affordable, Workforce Housing
Today, Cinnaire, The Community Preservation Corporation (CPC) and National Equity Fund (NEF) announced a joint partnership in CPC Mortgage Company, a national mortgage lending company specializing in multifamily Agency finance products. This first-of-its-kind cooperative leverages the resources and expertise of its three nonprofit owners to increase access to flexible Agency mortgage capital in communities where it is needed most, with the goal of expanding and preserving affordable and workforce housing. CPC Mortgage Company also provides a new avenue for socially responsible investments in housing, giving multifamily owners and investors an opportunity to access permanent capital, while supporting and advancing its members’ nonprofit work to create a positive impact in communities.
“For some time, Cinnaire had been intentionally seeking opportunities to expand our lending platform by partnering with an organization with the full suite of Agency products,” said Susan Frank, Executive Vice President of Business Development at Cinnaire. “After exploring several options, we chose CPC Mortgage Company because it aligns well with our mission of developing and preserving affordable housing and has invested $3.2 billion in Agency lending.”
The partnership creates the first of its kind impact-driven, nonprofit mortgage lender offering a range of permanent multifamily lending products from Freddie Mac, Fannie Mae, and Federal Housing Administration (FHA) products including conventional, affordable, and small balance lending for the acquisition, refinance, rehabilitation, and development of multifamily housing.
“Cinnaire is acutely aware of the challenges that many developers face in accessing capital in the affordable housing industry, and we are committed to expanding access to financing that supports multifamily development in areas that need it most,” said Mark McDaniel, Cinnaire President and CEO. “It was a priority for us to partner with organizations with the same mission and we are looking forward to joining CPC and NEF in providing developers expanded access to quality financial tools to build equitable communities.”
“Our mission is to leverage the unique expertise of this partnership to bring flexible Agency mortgage capital to communities to expand and preserve affordable and workforce housing. We’re moving the mortgage industry towards a place where we can ask the question, where do we need to be to make the biggest impact, and how can we use our unique skills and reach as nonprofits and affordable housing experts,” said John Cannon, President of CPC Mortgage Company. “Whether it’s affordable, conventional, or small we look at every deal through a lens of impact and potential, and every borrower and every transaction has the ability to help us continue our work of investing in communities.”
CPC Mortgage Company is the only Agency seller/servicer bringing an impact model to mortgage lending. CPC Mortgage Company works with owners and investors of all sizes, who are seeking a like-minded partner that understands the unique capital needs of their housing stock, to increase access to flexible agency capital with the ultimate goal of expanding and preserving affordable and workforce housing.
CPC Mortgage Company is a mission-aligned partner helping Freddie Mac and Fannie Mae achieve their goals under Duty to Serve plans. By reaching beyond the traditional Agency customer base to owners of multifamily rental properties in overlooked and underserved communities, the new cooperative owners of CPC Mortgage Company aim to preserve the stability and affordability of rental housing in neighborhoods where it’s needed most.
“At a time when we are facing a national housing availability and affordability crisis, we need to marshal our resources to expand and preserve housing in our communities. When we originally launched CPC Mortgage Company, our goal was to use our unique experience as a nonprofit lender to reach multifamily owners who either didn’t have access to agency products or didn’t have the technical expertise needed to take advantage of them. We’re extremely pleased to have two mission-aligned companies like Cinnaire and NEF joining us to help expand our impact and ability to reach the owners and communities that are most in need,” said Rafael E. Cestero, CEO of The Community Preservation Corporation.
For borrowers and institutional investors who are focused on Environment, Social, and Governance (ESG) principals, CPC Mortgage Company provides the unique opportunity to put their mortgage dollars to work supporting social equity in communities. The revenue generated through CPC Mortgage Company’s lending and servicing supports its three members’ nonprofit missions and work to create a positive social impact through their investments in housing and community development across the country.
“Our joint partnership in CPC Mortgage Company present a powerful opportunity to offer additional nonprofit, mission-driven capital solutions for developers to build and maintain safe, stable, and affordable housing to help residents and communities to thrive for the long-term,” said Matt Reilein, president and CEO of NEF.
By doing business with CPC Mortgage Company, its customers are helping Cinnaire, CPC and NEF create more sustainable communities, address issues of racial equity in housing and development, and expand and preserve affordable and workforce housing in underserved communities.
CPC Mortgage Company was initially launched as a fully-owned subsidiary of CPC in Fiscal Year 2019, with its focus on bringing the company’s expertise in affordable housing and small building finance to the mortgage market. In Fiscal Year 2022 CPC Mortgage Company executed more than $560 million in Agency originations, keeping up a pace of roughly 32 percent year over year growth. Since inception, 97 percent of units financed by CPC Mortgage Company have been affordable, 77 being affordable to households earning less than 80 percent of area median income.