Q&A with Michael Staton on New Jersey: Keeping an Eye on New Governor, Workforce Housing, Interest Rates, Dodd Frank
by Josh Anderson
Michael K. Staton, with over 30-years of experience in affordable housing, is currently Vice President of Community Lending at Community Preservation Corporation (CPC) and is responsible for identifying borrower needs, establishing lending relationships, analyzing financial data, and determining the merits of specific loan request and recommended structures. Michael has extensive experience in financing multifamily housing development transactions using a variety of products and structures, including: conventional construction and permanent financing; tax-exempt bond executions; bridge loans; Freddie Mac lending platforms; and federal and state tax credit programs. He will be a featured speaker at CapRE’s 2018 New Jersey Forecast. To preview the event, connected with Staton for a sneak peak into his latest activity, perspective and predictions for 2018.
CapRE: Thank you for chatting with us today. We’re looking forward to seeing you at our 2018 New Jersey Forecast. Please share with our readers a bit about yourself.
Staton: I have over 30-years of experience in affordable and multifamily housing using a variety of products and structures, including: conventional construction and permanent financing; tax-exempt bond executions; bridge loans; Freddie Mac lending platforms; and federal and state tax credit programs. As VP of Mortgage Originations with Community Preservation Corporation (CPC) am a Freddie Mac and FHA seller-servicer. I am working on a number of Freddie Mac transactions and executions in NJ and NY. Freddie and Fannie are two of the largest mortgage companies in the country company, particularly for multi-family executions, with Conventional, Target Affordable, Small Balance Loans being the three most prominent programs.
CapRE: And what have you been seeing on the ground in New Jersey?
Staton: There are a lot of lending opportunities in rental housing in my marketplace, which is New York City, New Jersey, Philadelphia and other areas on the east coast. Rental housing is still very much in demand, particularly affordable rental housing. I do not see that changing in the near future. With the growing number of millennials, there is going to be more of this demand. In the Northeast, it’s about job creation and job stability. Unemployment is still relatively low compared to other places. So the need for rental housing, particularly workforce housing, is going to continue to climb.
CapRE: And what forces or trends are contributing to this demand?
Staton: In New Jersey, we have a new governor-elect. And in terms of workforce housing, it’s my understanding, based on the platform that he ran on, that he wants to create more opportunity for that type of housing. One way that he plans on doing that is through his Deputy Governor, who he will appointment as the Commissioner of the Department of Community Affairs and the Chairperson of the New Jersey Housing and Mortgage Finance Agency (NJHMFA) who will oversee state housing initiatives. The Commissioner/Chairperson will also be the gate keeper in NJ for Private Activity Bonds for multifamily housing that were preserved in the final federal tax bill and will have a tremendous impact on the state as it relates to multifamily workforce housing. CPC will continue to work with NJHMFA as a partner in providing the permanent debt through Freddie Mac Target Affordable and other programs.
CapRE: What are you most excited about right now regarding the New Jersey marketplace?
Staton: Well, Freddie Mac has a program that is called the Small Balance Loan (SBL) program, which has been picking up tremendous activity all over the county, but particular in New Jersey and New York City. In New Jersey, there are so many small properties between 5-50 units with developers/owners that may not don’t have really deep pockets like larger development companies, but have enough experience and wherewithal to own small properties. The SBL program is for simple acquisitions and re-financing. It offers long-term, fixed interest rates, for loans anywhere between $1 million to $6 million. I see that getting a lot of traction. I see places like Montclair, Bergen County, Jersey City, etc. having a lot of opportunities that would be a perfect fit for the SBL program.
CapRE: And are you keeping an eye on anything out there that might be a cause for concern?
Staton: Interest rates have gone up a bit. I’m keeping an eye out on that, though interest rates are still relatively overall low. They’re just creeping up a bit. Obviously changes to regulations as well. There have been discussions about repealing certain provisions of Dodd Frank bank regulations, so I’m keeping an eye out on whether that materializes or gets any momentum and what the affect will be concerning the stability of the mortgage industry.
CapRE: On a more positive note, what are you most looking forward to about CapRE’s 2018 New Jersey Preview?
Staton: I love events like this. Being a panelist is a great opportunity to network with my peers and potential customers, and to get a feel for what they’re looking for as it relates to borrowing needs. I’m looking forward to the opportunity to hear more about prospects and about what’s getting traction out there and how I can assist in bringing these deals to fruition.
CapRE: So what’s the bottom line in New Jersey? What’s the special ingredient to this state?
Staton: It’s all about location, location, location. I work in New York and live in New Jersey and that works perfectly. I take New Jersey transit into work everyday. The cost of living is much more reasonable in New Jersey than it is in New York City too. Also, the proximity of New Jersey to so many different places. I live a couple of minutes from every major artery in terms of the interstate. I’m several minutes from the NJ turnpike, several minutes from 195 to get to the shore, several minutes from 295 and 95. I can get anywhere quickly. I can get to New York in a little over an hour with traffic. I can get to Washington DC in 3 hours. I can get to Philly in 45 minutes. The proximity of New Jersey, and being able to get anywhere, is a great aspect of the state. We have other great features as well, great schools and universities, tools too, good jobs, improved infrastructure. It’s really all about location and services.
CapRE: You don’t have to convince us! Thank you for your time. We’ll see you in Jersey City.