Talking Heads: Paul Weissman, Hunt Mortgage Group
By Darryl Hicks
10 min read
Based in El Paso, Texas, Hunt Companies is one of the oldest and largest real estate companies in America, with over 6,000 employees and $30 billion in assets. Hunt is primarily known for being the largest military housing owner in the country.
Hunt Companies also has a thriving mortgage business, Hunt Mortgage Group, which operates in 19 major markets nationwide and finances everything from multifamily housing to affordable housing, manufactured housing, healthcare/senior living, office, retail, industrial, and self-storage facilities.
In July 2015, Hunt hired Paul Weissman, a seasoned lender with a 20-year track record in multifamily housing, as its Senior Managing Director of Affordable Housing Finance with the goal of establishing HMG as a Top 5 lender in the affordable housing space.
Weissman’s first job after earning a law degree and MBA was Associate General Counsel for Simpson Housing Limited Partnership in Denver. He later transitioned from the legal side of the business to finance, working as a tax credit syndicator and investment banker, and today is one of the industry’s most successful lenders.
He has financed well over $1 billion of affordable and market-rate multifamily transactions using almost every known subsidy, including tax exempt bonds, Section 8, Section 202, Section 236, Low Income Housing Tax Credits, HOPE VI and FHA’s Tax Credit Pilot Program.
Tax Credit Advisor sat down with Weissman to talk about his time at Hunt and where he sees the company headed.
Tax Credit Advisor: Let’s discuss your early life. Where did you grow up? What aspirations did you have as a child? Where did you go to college? What was your major?
Paul Weissman: I was born in New York City, but my family moved to Boulder, Colorado when I was two years old. I did a lot of theatre work when I was young and wanted to be an actor. Then I had a transformative experience that derailed my acting aspirations when I studied abroad in France as a junior in high school. I attended Lewis and Clark College in Oregon as a Foreign Language major with a minor in Eastern European Studies. I spent a semester in the former Soviet Union and when I graduated from college I moved to Taiwan and taught English for a year. I came back to the United States uncertain what I wanted to do, and wound up back at home in Boulder, earning a law degree and MBA from the University of Colorado.
TCA: What led you to a career in affordable housing?
Weissman: An opportunity arose with Simpson Housing here in Denver. The general counsel was very interested in affordable housing development. My role was in-house counsel, but because of my MBA, he had me reviewing numbers for development opportunities. That was how I got into affordable housing. Later on, we acquired a tax credit syndication and development firm that was a division of Kaufman & Broad, which became Simpson Housing Solutions.
I moved out to California and worked in that group for a couple of years and gravitated away from the legal side of the business and moved to the financing side. I came back to Colorado and worked for Newman and Associates, and ever since I’ve been primarily focused on the debt side.
TCA: Let’s focus on your current employer, Hunt Mortgage Group. What percentage of Hunt’s $11 billion servicing portfolio is affordable? Do you lend nationally or in certain geographic areas? What projects do find most appealing?
Weissman: Roughly 10 percent of our existing servicing portfolio falls under my group. I am based in Denver, but we have offices in 19 cities, so we lend nationally. We are happy financing both preservation and new tax credit deals. I personally, and many on my team, find new development deals more interesting and exciting. By virtue of the number of assets that exist, and the number of new deals that get done every year, our volume trends toward preservation.
TCA: The affordable lending group that you manage is a small division within a very large company focused on a lot of different things. How do you keep growing within such a diverse company when everybody is competing for attention and resources?
Weissman: In many ways, the Hunt Companies has a tremendous interest in businesses that mix public benefit and private activity. Within the mortgage group, affordable housing is seen as a key component because it fits squarely in the company’s overall strategic plans. The mortgage business has been successful for the Hunt Companies and it continues to provide capital for the business to grow it. So I have not found a lack of attention in any way, shape or form as it pertains to the affordable housing group. I’ve grown from a few origination staff when I started to hiring almost a dozen people during the past year.
TCA: What attracted you to Hunt?
Weissman: There are a lot of different institutions involved in the affordable housing business and I’ve worked for a number of them. Wall Street-type banks, commercial banks and private firms. I enjoy the environment of a private firm and the entrepreneurial spirit that exists within Hunt. I feel strongly that if I come up with an idea that furthers our business line, and is likely to be profitable, I am going to get a fair hearing. Unfortunately in a large financial institution I might come up with something and the response will be ‘Is that really part of our business?’ or ‘how much scale can you do?’ along with other roadblocks that are common in larger, bureaucratic companies. That is one of the things I find most appealing about Hunt.
TCA: You have an extensive background in development, tax credit syndication, lending and investment banking. How do all these business skills impact your daily routine and the types of projects you finance?
Weissman: First and foremost, I like to be a resource to my clients. I’ve tried to build this group with a diversity of backgrounds and abilities. Some of our recent hires include Sean Spear, who spent a fair amount of time in the public sector at the California Debt Allocation Committee and who worked for the Cities of Los Angeles and New York. He adds depth for clients that are working with cities, housing authorities and states, because he can speak their language in a way that other people may not be able to. Aaron Wooler, also a recent hire, came from Century Housing, a large California-based CDFI that works with non-profits and other institutions. Aaron brings a non-profit lender’s perspective to things that we do. My background, being involved in a number of different facets, helps me understand what our clients hope to accomplish and devise solutions that other traditional ‘bread and butter’ lenders might not think about. This is where I see added value in my background and the backgrounds of the other members of our group.
TCA: What distinguishes Hunt Mortgage Group from other FHA Lenders? What types of projects and/or markets do you specialize in?
Weissman: Our deep experience helps us explain a lot of affordable housing programs to FHA staff who oftentimes may not have seen that many affordable housing transactions. That has changed a lot in the last 3-5 years but when the Tax Credit Pilot Program first came out and when people first started executing transactions where tax exempt bonds were set up in escrow structures to generate 4 percent tax credits, many of the folks at HUD didn’t have a solid knowledge base of how 4 percent bond transactions worked. We are in a position to help educate them, work through those kinds of issues, and
I think that makes us somewhat unique. We do ‘bread and butter’ market- rate multifamily apartment deals in the FHA space, but our uniqueness lies within affordable housing.
TCA: What major trends are you seeing in today’s debt markets?
Weissman: It’s really interesting how rates continue to stay incredibly low. For a moment, it seemed like they would break out of the low cycle that they’ve been in, but in the last two weeks we’ve seen the 10-year Treasury decline another 15 basis points. From a trend perspective, we continue to see very aggressive lending from commercial banks that I believe is driven primarily by CRA obligations. That said, I think we are starting to see the agency loans become more competitive with the offerings that those banks are providing. Fannie Mae and Freddie Mac are becoming more comfortable with higher levels of construction on rehab preservation-type deals. The FHFA mandate to increase production in the affordable and small balance areas has really driven Fannie and Freddie to be more innovative than they have in the past.
TCA: Where do you see your company in the next five years in terms of its strategic vision?
Weissman: Our desire is to continue to grow this business. The first half of 2016 was the best we’ve ever had in terms of building production staff and we expect that to continue. Our pipeline has rapidly increased by nearly $500 million in a very short period of time. I am excited about building out the affordable and FHA teams. One of the next areas where I intend to focus more attention is senior housing. I see opportunities in the senior housing space, particularly the way that senior care relates to senior housing. My hope is that within five years we will be a Top 5 affordable housing lender and we will re-establish the position that this company has historically had in the affordable housing space.
TCA: For borrowers who are new to FHA – do you have any tips, recommendations or pitfalls to watch out for?
Weissman: Many borrowers struggle with the paperwork that is required. There tends to be a desire to fight back and say “is this really necessary?” or ‘why do they need this?’ It’s important to realize that while we might be able to get waivers to avoid providing certain types of documentation, the effort to do so will chew up a lot of time. It will almost certainly take a lot longer than if we simply provide the information that is typical and standard under the FHA application process. That’s one of the main things that people need to understand. There is flexibility, but that comes with a lot of effort and time. Part of the reason that people complain about the duration of FHA transactions is that they are fighting the system rather than simply complying with all of the standard FHA requirements.
TCA: What has been your favorite affordable housing project thus far at Hunt?
Weissman: The most interesting project that Hunt has done closed shortly before I came over. It was a RAD transaction that involved 13 non-contiguous sites and almost 1,600 units of affordable housing, managed by the Housing Authority of the City of El Paso, Texas. It was the largest RAD transaction at the time, representing a $250 million initial public/private investment, which is expected to grow to $1 billion over the next five years. It was also the first transaction of its kind under Freddie Mac’s tax exempt loan program. We continue to do a fair amount of work with the City of El Paso and they have been a great partner. Although I wasn’t involved on the project at the beginning, I’ve done some post-mortem work and it’s clearly one of the most interesting projects in affordable housing that has been done over the past few years.
