Breaking Ground

In January 2021, Stephanie Wiggins joined PGIM Real Estate—the $210 billion real estate investment and financing business of Prudential Financial—as managing director and head of agency and FHA production where she oversees debt structuring, pricing strategies, transaction negotiations and closing and due diligence reviews.

Wiggins has more than 35 years of commercial real estate finance experience, including nearly 20 years as executive vice president/chief investment officer at

AFL-CIO Housing Investment Trust. Before joining PGIM Real Estate, Wiggins was a senior vice president and chief production officer for the Federal Housing Administration (FHA) team at Walker & Dunlop.

Throughout her career, Wiggins has originated, evaluated and approved over $75 billion in multifamily and healthcare commercial property across the country.

Tax Credit Advisor sat down with Wiggins to learn more about PGIM Real Estate and its loan programs and what distinguishes it from other lenders.

Tax Credit Advisor: How long has PGIM Real Estate financed affordable housing deals? What were your origination volumes like in 2023 and what are your forecasts for 2024?

Stephanie Wiggins: Prudential Financial has had a longstanding commitment to financing affordable housing since the late 1970s through its Impact and Responsible Investing group. PGIM Real Estate, the real estate investment and financing arm of Prudential Financial, acquired an agency lending platform in 2000 that gave us the ability to execute Fannie Mae, Freddie Mac and FHA transactions. PGIM Real Estate and Prudential’s impact investing group have a longstanding working relationship and have collaborated since the mid-2000s. And now the emphasis on collaboration is greater than ever. In terms of origination volumes, like every agency and non-agency lender, business was down in 2023. Despite the acute need for affordable housing across the spectrum, spanning everything from naturally occurring to Big A affordable, higher interest rates coupled with a lack of investment sales activity and continued uncertainty in the market caused fewer transactions to close last year. Fannie, Freddie and FHA production volumes were all down as well. But since the beginning of 2024 and forecasting to December, we are beginning to see more activity. We are feeling more optimistic and even though we’re still operating in an uncertain interest rate environment, we’re pushing to do 30 to 40 percent more loans in 2024 than we did last year.

TCA: How large of a portfolio are you servicing?

SW: Our total multifamily servicing portfolio is $61.9 billion, $45 billion of which is agency paper, as of Dec. 31, 2023. If we further delineate the affordable portion, I will say that Big A is about 12 percent of the agency portfolio. 

TCA: Are there sections of the country that you prefer lending in, or do you lend nationally? 

SW: PGIM Real Estate lends nationally in all 50 States, plus DC and Puerto Rico—but we let our clients lead the way. They’re the experts in finding deals in markets where there is a need and where there’s value. They know what communities need to be served and so we meet them wherever they are. To dig a little bit deeper, most of our loans are made in states with large populations, because that’s what drives tax credit allocations, and in coastal areas where there’s an affordability crisis. We employ 25 dedicated lending experts across 13 offices, with an average of 25 to 27 years of experience. 

TCA: Are there borrowers you prefer working with?

SW: I want to work with everyone to get our production numbers up. All kidding aside, we work with the nation’s largest and most experienced affordable housing developers who have a proven track record of success. We serve as technical advisors for smaller developers and operators/owners who are just starting in the business. We also work with smaller housing authorities and mission-driven nonprofits to help them figure out all of the financing options that are available to them as they emerge. The preference of PGIM Real Estate is to work with borrowers regardless of size, as long as they’re committed to affordable housing and they understand how the uniqueness of each deal and jurisdiction requires critical thinking and problem solving while working together with us, their lender and trusted advisor.

TCA: How would you describe the past 12 months and how is 2024 shaping up?

SW: Fannie Mae and Freddie Mac are getting a lot of traction with their workforce housing programs. These programs don’t fall under the 2024 Federal Housing Finance Agency (FHFA) lending cap, so that gives us all the motivation to chase those types of deals and to advise our borrowers on the benefits. Another huge issue is rising taxes and insurance (T&I). Whether it’s an acquisition, conversion or refinance, navigating the rising costs of T&I, as well as working through collections and defaults that resulted from the pandemic, are impacting affordable housing owners-operators. Looking ahead, we’re keeping a watchful eye on looming loan maturities, which will be super expensive to refinance for loans that were done in 2020, 2021 and the first half of 2022. Liquidity will be key. Fannie’s and Freddie’s missions are to provide liquidity to the market; it’s not in their charters to bail out deals that were done when the Secured Overnight Financing Rate (SOFR) was at five basis points. That capital resource will be hugely important this year and next, especially as capital events become more and more prevalent.

TCA: What’s your most popular loan product and why? Are you looking to introduce any new loan products in 2024 or the near future?

SW: The most popular products are the ones that are priced competitively with the ability to lock rates quickly as owners/operators are coming to terms with the uncertainty of the interest rate market. Fannie Mae is pulling back on its floating rate offerings, and Freddie Mac is including some additional tests for its adjustable-rate offerings. Short-term, five-year, fixed-rate products are hot tickets right now. If you compare the five-year products with longer amortization and a rate buy-down, then you have a winning recipe. Not only are you getting interest rates that, per the buy down, are more in line with what you wish your long-term capital costs would be, but you’re also getting the flexibility of a shorter term, which speaks to all of our hopes and enthusiasm around the market getting back to some sort of normalcy.

We’re always looking for ways to expand our affordable housing product suite to best serve borrower needs. That said, we are continuing to work with external partners to craft one-stop-shop financing solutions for the most complex deals, including new construction and sub-rehab deals. That’s going to be super important, as banks have already pulled back on construction lending and on-balance sheet offerings, including bridge loans, so expect PGIM Real Estate to fill those gaps in the marketplace.

TCA: What types of affordable housing deals do you find most appealing?

SW: Any deal that helps preserve, maintain or improve affordable housing stock is vital. If you’re asking what challenges borrowers are bringing to us and what themes are emerging, I can give you a couple of examples. Many of our borrowers are looking to find tax relief, so adding a nonprofit into a deal so that it can qualify for a local abatement or other resources has been prevalent. The preservation of affordable housing through agency programs and providing more competitive pricing on naturally occurring affordable housing and mission deals is again a hot ticket. And then anything that helps create affordable housing, so preservation or sponsored dedicated workforce where you’re electing to convert market-rate units to affordable is appealing. All of these strategies serve a common purpose to increase the supply of affordable housing, which is job number one.

TCA: What distinguishes PGIM from other lenders?

SW: PGIM Real Estate has a very large platform. It’s not just agency lending. It’s our general account lending programs, it’s our equity programs. It’s a huge platform that doesn’t shy away from challenging and complex deals. Part of our identity is to bring your challenges. We have a deeply experienced team that’s committed and thrives on working out creative solutions with our borrowers and with agencies. Our deep relationships with all parties create this team that is connected to every deal by a sense of mission and a sense of wanting to conquer challenges. It’s having the ability to pivot across capital sources, whether it’s FHA, Fannie, Freddie, our internal bridge, our external bridge partners, the life insurance company or our debt funds. We’re not just a one-trick pony.

TCA: I read in your bio that you enjoy mentoring younger women. What can you tell me about that?

SW: It goes beyond women. I am deeply committed to moving our industry into the future. Promoting diversity, equity and inclusion across all categories is important to me. I spend a fair amount of my time serving on advisory and industry committees that lift people and get them interested in commercial real estate finance. I started in the business in 1988, and even though I’m fourth generation commercial real estate, which is pretty unusual for someone who looks like me, it was a lonely existence for a very long time. I believe that diverse perspectives are the key to performance. Whatever your goal is, if you have different perspectives in the room to broach a challenge and solution together, you’re going to get better outcomes. I’m deeply honored for the opportunities that I’ve been given to help others move forward in this business.

TCA: What was your favorite project over the past 12 months?

SW: It’s called Northgate Apartments in Camden, NJ. Our partner is Hudson Valley Property Group. It was like strapping a deal to your back and climbing Mount Everest. The result will be transformational to the Camden community, but it was complex with a lot of challenges in getting the vision to be realized. Raising equity was difficult, especially in a rising rate environment where resources were being grabbed by everyone. The property comprises 321 units, 96 percent of them Section 8. The capital stack reads like alphabet soup. It’s an acquisition/rehab financed with a mix of Federal Low Income Housing Tax Credits funded by Enterprise, Aspire NJ State Tax Credits and a Department of Housing and Urban Development FHA 221(d)4 loan originated by PGIM Real Estate. The endeavor represents one of the first affordable housing preservation projects to leverage the new Aspire tax credit program administered by the New Jersey Economic Development Authority (NJEDA), which was established under law as part of the Economic Recovery Act of 2020 and provides tax credits to incentivize strategic real estate projects in New Jersey. The City of Camden also supported the project with a long-term PILOT Agreement, which will be instrumental in the property’s future success. Hudson Valley plans to turn this property around. The project has significant maintenance, market and security challenges, but Hudson Valley has a plan to address each of those challenges with fervent intention. The deal has strong public support, including from HUD, the Mayor of Camden and affordable housing advocates. There’s no better group than Hudson Valley to pull this off. They’ve preserved more than 10,000 units across 60 properties serving 20,000 residents, and they have deep experience in Camden. I am proud of the work that our team did and of our partnerships with Hudson Valley and HUD.