An Easy Way to Build Strong Relationships with Developers and Real Estate Investors

By: Paul Watson, First Vice President, Commercial Banking at Bankers’ Bank

In the current bank environment, many community banks are having more frequent discussions on balance sheet management, CRE Concentration and liquidity. Agency lending is one solution that can help banks with these challenges.

Agency Lending Placement provides you access to the suite of housing-focused commercial loans that are authorized by Fannie, Freddie and HUD.  Loans are funded by the secondary market.  With Agency Lending you are able to offer financing options for multifamily projects, senior living projects, student housing projects and manufactured housing communities.  This off-balance sheet lending solution is a great tool for meeting the needs of your housing-focused developers while managing your balance sheet.  Your bank receives the benefits of balance sheet relief while receiving fee income. At the same time, your borrow benefits from lower and long-term fixed rates, nonrecourse financing, long term interest only payment options and opportunities for cash-out refinances.  Agency Lending works for new opportunities or seasoned deals that may be coming up for repricing.

Developers often seek financing options from institutions that support their unique needs and can provide tailored solutions. Agency Lending Placement creates opportunities for you to build strong relationships with developers and real estate investors. As banks become partners in the growth and success of these enterprises, they gain valuable insights into the clients’ financial operations. This relationship-building aspect can lead to additional banking opportunities with your bank. When you become a Referring Bank in Bankers’ Bank Agency Lending program you stay competitive and foster a positive reputation in the communities you serve.

Agency Lending can also be a valuable tool for borrowers in the commercial real estate industry, particularly in the multifamily sector. From the developer’s perspective, Agency Lending offers several advantages, including greater flexibility and customization in loan terms, more favorable terms than traditional lenders, and a streamlined loan process. However, not unlike traditional lending, Agency Lending, is susceptibility to market fluctuations. As with any financial decision, it is important to carefully consider all of the factors involved before deciding whether Agency Lending is the right choice for your organization.  Contact your Bankers’ Bank Commercial Loan Officer today to learn more about the benefits of Agency Lending for your bank.