Over the last few years, Impac Mortgage Holdings has grown its lending to borrowers who don’t fit into the Qualified Mortgage box, but now, the lender is positioned to significantly increase its non-QM lending thanks to a new partnership with one of the nation’s largest mortgage real estate investment trusts.
This week, Impac and Starwood Property Trust announced a deal that could see Starwood buying as much as $600 million in non-QM loans from Impac over the next 12 months.
Under the terms of the deal, Impact will originate the non-QM loans, which Starwood will then buy and then securitize.
According to the companies, the “strategic relationship” will see the companies collaborating on the origination and securitization of the loans and will allow Impact to increase its non-QM lending.
As part of the deal, Impac will retain the right to co-invest, along with Starwood, in Starwood-sponsored securitizations that contain Impac-originated non-QM loans.
The partnership is the formalization of an existing relationship between the two companies.
According to the companies, Starwood is currently working on an initial securitization of non-QM loans, which will completely backed by loans originated by Impac. Impac said that it plans to co-invest in the securitization.
“We are pleased to have Starwood as a partner in the creation of responsible alternative loan products that satisfy both consumer need and capital market demand,” Impac President George Mangiaracina said.
“After having collaborated in the non-QM space for several years, we are excited to formalize our existing Starwood relationship,” Mangiaracina continued. “This arrangement will further Impac’s competitive advantage in the non-agency segment of the residential mortgage market and permit the company to participate in the longer-term economics of the loans we originate.”
Starwood specializes in originating, acquiring, financing and managing commercial mortgage loans and other commercial real estate debt, but this is hardly the REIT’s first foray into single-family housing.
Back in 2014, Starwood Property Trust spun off its residential division and founded Starwood Waypoint Residential Trust.
Starwood Waypoint Residential focused on investing in single-family rentals and non-performing loans.
Then, in 2015, Starwood Waypoint merged with Colony American Homes in a deal that combined two sizable operators of single-family rentals to form Colony Starwood Homes.
Last year, Colony Starwood Homes readopted the Starwood Waypoint name, rebranding to Starwood Waypoint Homes. And later in the year, Starwood Waypoint Homes merged with Invitation Homes to create the nation’s largest single-family rental operator.
And now, Starwood is ready to help Impac grow its non-QM lending.
“We are excited to formalize our partnership with Impac, which we believe will help scale our opportunity to provide non-QM loans to high-quality borrowers while sourcing investments that will continue to deliver strong risk adjusted returns for Starwood shareholders,” Steven Ujvary, senior vice president of Starwood Capital Group, Starwood Property Trust’s parent company.
“Impac is a proven market leader in the non-QM space and we have collaborated on the acquisition of approximately $900 million of Impac originated non-QM loans,” Ujvary added. “We look forward to continuing to work together to deploy capital into the underserved residential mortgage market.”