Greenman: Centennial is a mortgage bank that provides capital through HUD and USDA insured loan programs for properties located anywhere in the US. Centennial only provides government insured mortgages that are insured by GINNIE MAE and then sold as mortgage backed securities. As an approved HUD/USDA lender for both multifamily apartments and health care facilities (board and care, assisted living, skilled nursing), Centennial loans can assist with the acquisition, refinance, or substantial rehabilitation of an existing apartment or facility, as well as for the construction of a new apartment or health care facility. Centennial is one of only a few privately held mortgage companies making HUD loans. Through two lines of credit, Centennial has no limit on the size of the FHA or USDA insured mortgages it can fund. Additionally Centennial's mortgages are also insured by GINNIE MAE. Centennial sells "participations" in its mortgages to Wall Street investors (eg; Credit Suisse) in order to refill its credit lines. HUD & USDA/Ginnie MAE backed securities are backed by the full faith and credit of the Federal Government (unlike Fannie and Freddie) and thus are very desirable investments.

Centennial is committed to providing an exceptional service experience to our borrowers by focusing on excelling on the delivery of the FHA and USDA mortgage loan products. Regional and national banks and a few large mortgage companies directly compete with Centennial in financing FHA & USDA mortgages. However, most of these competitors also provide conventional financing and, as a result, aren't as specialized in the provision of FHA and USDA insured loans. Due to our boutique emphasis on FHA and USDA loans, Centennial is better positioned to fully implement the LEAN and other Continuous Improvement processes throughout the company, ultimately benefitting our clients.

GlobeSt.com: How does Centennial Mortgage work with HUD? Which of their programs are you providing capital for?

Greenman: As an approved MAP (Multifamily Accelerated Processing) and LEAN (HUD Section 232 Program) lender, Centennial underwrites loans for apartments and healthcare facilities that are then submitted to HUD for review. Once that approval (firm commitment is issued by HUD) is received from HUD, Centennial is able to draw upon its credit lines to make the loan to the borrower. Because HUD has insured the loan (FHA mortgage insurance) , Centennial can then also obtain GINNIE MAE insurance and with GINNIE MAE and HUD/FHA insurance on the mortgage, Centennial is able to sell that loan on Wall street to investors seeking participation in mortgage backed securities. Securities insured by FHA/GINNIE MAE are very desirable investments as they are backed by the full faith and authority of the Federal Government. Centennial provides capital for all FHA multifamily programs (221d4 new construction/substantial refinance, 223f acquisition refinance, and 223A7 streamline refinance) and also HUD Health care facilities (232 refinance, streamline refinance, and new construction/substantial refinance, eg; board and care, assisted living, and skilled nursing facilities).

GlobeSt.com: What are your thoughts on the multifamily sector? Do you believe it will sustain the growth it has over the past few years? Where are the opportunities currently?

Greenman: While rising interest rates have an overall downward impact on the refinance demand, recapitalizing the nation's affordable housing stock, including the recapitalization of the entire HUD public housing portfolio through HUD's Rental Assistance Demonstration (RAD) Initiative, along with the expiration of the initial 15-year compliance period for Low Income Housing Tax Credit (LIHTC) Investors over the next couple of years, indicates that there will be a lot of opportunity to utilize HUD's FHA insurance programs combined with tax credits to recapitalize both of these affordable housing portfolios.

GlobeSt.com: What trends do you see happening in healthcare real estate?

Greenman: Due to both the economy and our aging population, as well as many of whom are not as financially prepared as they should be for the coming retirement years, the demand for affordable housing continues to grow both in our urban and rural markets. USDA caters to rural affordable housing, and with an increasing aging population in these communities, along with flat economic growth and little market for rent increases in most of our rural markets, both the FHA and USDA insured mortgage programs will continue to play a vital part in meeting that need. HUD's FHA 232 LEAN program, which provides high LTV, non-recourse, long term financing for health care facilities is also anticipated to remain strong as borrowers continue to look at affordable fixed rate financing as one way to reduce rising health care costs for these facilities where Medicare and Medicaid reimbursement rates continue to see increased pressure to serve more with the implementation of the Affordable Care Act. With many states offering Medicaid waivers, and flexible programs under Medicaid that address the needs of our frail elderly within their homes rather than automatically forcing movement to a higher cost licensed care facility such as an assisted living facility, adult family home, or ultimately, a skilled nursing facility, and, with the implementation of the Olmstead Act across the country, targeting the removal wherever possible of individuals who are chronically disabled but who with a good array of support service, could remain in their homes, or move too independent homes, look for more "Housing with Services options" to appear in the market, marketplace, seeking affordable long term financing as they can be a means of addressing the needs of our frail, elderly and disabled at a significantly lower cost.

GlobeSt.com: Which multifamily and healthcare projects do you feel are most likely to get financed in 2014 and why?

Greenman: The preservation as well as the creation of affordable housing will remain a huge emphasis for HUD and the USDA, as both strive to preserve existing subsidized portfolios. In addition, as many original tax credit investor/syndicators have maxed out on all tax benefits associated with the LIHTC program, these early LIHTC properties are seeking the recapitalization as they near the end of their initial 15-year compliance periods.

GlobeSt.com: Do you expect the demand for multifamily loans associated with HUD and USDA to remain robust in the next 12-24 months?

Greenman: Even with so much more private capital returning to the multifamily sectors, I still see a likely increase in USDA loan demand, as the language in this year's Appropriations budget will make it easier for more smaller communities to qualify as rural and will thus make getting these loans approved easier. While the HUD loan demand is anticipated to see a 75% decrease in its 223A7 streamline refinance program, due to the increase in interest rates making those loans not as feasible as in previous years and also because so many have already refinanced under that program, new construction overall and especially with a HUD loan is anticipated to increase 30% and regular HUD 223f refinances is expected to also see a 25% bump up. This level of loan production is anticipated to remain steady over the next 24 months.

Are there challenges you feel the industry is likely to face now and in the future?

Greenman: Uncertainty in the marketplace is a huge turn off for borrowers even if loan program terms such as HUD's are fabulous. When you add the recent interest rate fluctuations to the lack of a consistent and predictable loan processing experience at HUD, which at present includes very long processing times often approaching a year or more (depending on which location you are dealing with), lenders are faced with the challenge of not only managing fluctuating rates, but also dated documentation and managing borrower expectations. While rates still remain attractive, and the ultimate HUD Transformation goals of a consistent, streamlined processing platform are all positive, the uncertainty surrounding the HUD Transformation/Transition as offices close and processing shifts to other locations over the next few years of the Transformation, creates challenges for lenders who use the HUD platform.

What are your thoughts on the capital markets and the availability of finance today?

With improvement in the economy, and continued lower than historic interest rates, community banks can often provide loans in rural areas quickly, however not at the same 40-year, fixed rate terms that USDA and HUD/FHA insured mortgages can. Plenty of other private capital (REITS, life insurance companies, etc) is available and the spreads over the Treasury have gone down, so there is plenty of competing capital available. As more and more individuals and families choose to rent vs. purchase, especially in urban markets, private capital is finding its way back to the multifamily market. However, HUD's FHA programs offer long term, fixed rate, non-recourse financing, which competing lenders generally do not. This is even more evident when financing health care facilities.