Joe Tomasello, area sales manager at Citadel Servicing Corporation, sat down with HousingWire to talk about the company’s latest expansion into commercial properties.
HousingWire: What led Citadel Servicing Corp. (CSC) to launch its new Commercial Property lending program which includes multifamily properties up to 100 units?
Joe Tomasello: We see a tremendous opportunity in the pure commercial space for our programs. The success CSC has enjoyed over the past two years financing smaller apartment buildings, mixed-use properties and small hotel/motels has led to demand for this new initiative.
Expanding this product segment to now cover apartment buildings up to 100 units, retail, office space, hospitality, strip malls and schools or daycare facilities is and was a natural evolution. It is something we have been working on for some time now and we know the market is now prime for our offerings.
HW: How does this newest offering fit in with Citadel’s Outside Dodd-Frank Plus program?
JT: The new commercial product is an extension of our already existing ODF Plus product. CSC’s ODF Plus product has been in place for a year now overtly and previously as a request offering. The ODF Plus has been used to finance multifamily buildings, mixed-use properties and hotel/motels under our slogan of “Anything with a bed.”
This product extension gives us a much broader platform of property types that we can now finance and offers our broker partners an amazing option for their borrowers that bridges the gap between the conventional commercial lending and hard money sectors.
HW: What has been the reaction to this product so far?
JT: Our broker partners are excited. They are now able to offer a product to their borrowers who need alternative financing on commercial properties with terms that are much more favorable then what you typically see in the conventional or hard money markets.
This program offers loan terms that are fully amortized over 30 years with no balloon payments, no lender points and rates in the 6’s compared to existing options that have shorter terms with balloon payments due within a few years, points due up front to borrowers and rates that are significantly higher. This product qualifies by debt servicing the subject property using rent rolls and lease agreements. It is a very simple product to understand and execute.
HW: What are some of the factors that make it challenging to offer this type of product, and how is Citadel meeting those challenges?
JT: Citadel Servicing Corporation is very used to challenges. Remember, if you will, that in 2011 CSC was the first lender to enter and arguably created the non-QM sector. We take great pride in leading the way with new product offerings and enhancing the opportunities that currently exist in the specialty finance arena.
This is possible for us because of the tremendous leadership we have within our executive management team which has over 100 years of cumulative experience.
HW: How has Citadel continued to set high standards in the non-prime industry and what’s next for Citadel?
JT: People often ask me what separates CSC from other non-QM lenders. The residential aspects of this market have seen a tremendous influx of companies in the non-QM space in 2018 and 2019 compared to previous years. There are three things that separate us from everyone else in the non-QM space:
- CSC is the market leader in rates and terms as well as the creator of unique products.
- CSC has the best proven programs that are easy to understand and execute.
- CSC via its comprehensive in-house training programs has created the most educated AEs in the specialty finance business.
We take great pride in educating and developing our AEs. This is why CSC-trained AEs are the most sought after and recruited in the industry. Some of our competitors openly recruit our AEs on a daily basis. They know a CSC-trained AE is an expert in structuring deals and educating business partners on process.
These two facets are the key for brokers when trying to close challenging files. We all know that in this business structuring a file correctly is critical for success.
What’s next in the CSC evolutionary process is to continue our steady growth by investing time and knowledge into our employees and business partners. CSC will continue to lead the way in the non-QM and related financial sectors by pioneering new products and offerings to give our broker partners the widest array of programs and lowest rates for their borrowers.
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