Balance Sheet Partner for Agency Debt (Multifamily Sponsors)

[Ethan G.]

I wanted to ask if anyone has had experience being a balance sheet partner for multifamily sponsors (or other investors) to obtain agency debt (Fannie, Freddie, etc.) and what the experience was like, etc. Thanks.

[Tony Castronovo]

I think the options are to get a KP or GP to join you.  My understanding is the KP is really just there as a guarantor for the loan (I believe 1% of the loan amount is a customary fee), whereas a GP has operational responsibilities (part of the operating agreement) and usually has an equity split at the GP level.  For newer deal sponsors it could make sense to bring on a GP for the extra credibility they have and/or other benefits such as help raising capital, etc. (assuming they have done their own deals).  Here is some good info:  https://www.biggerpockets.com/...