Westlake Village-based Velocity Financial Inc., a provider of small balance investor loans for commercial properties, acquired a majority interest in Century Health & Housing Capital for an undisclosed price and percentage.
Century is an issuer and servicer that provides government-insured Federal Housing Administration mortgage financing for multifamily housing, senior housing and long-term care or assisted living facilities.
Century originates loans via a borrower-direct origination channel. Loans are serviced through the company’s in-house servicing platform, which according to the company, creates formations of long-term relationships with clients and drives portfolio retention.
The majority interest acquisition, which developed in the second half of 2021 according to Christopher Oltmann, Velocity’s chief accounting officer, expands Velocity’s commercial mortgage product offerings through new channel growth. It also equips Velocity with the ability to provide new products to its broker network, according to a statement.
“Century’s lending expertise in multifamily, senior housing and long-term care/assisted living facilities is a market segment with strong growth potential that is scalable by leveraging Velocity’s technology-driven operating platform and nationwide origination footprint,” Oltmann wrote in an email to the Business Journal.
Velocity expects the acquisition to be immediately accretive to its earnings, according to a statement. “Going forward, it will help expand and deepen our relationships with mortgage brokers though expanded product offerings with the addition of FHA-insured multifamily loans,” Oltmann wrote.
Additionally, Velocity will be helped by Century’s government-insured product focus. That will act as a natural hedge through market cycles, according to the statement.
Century issued $158 million in unpaid principal balance of loans for the first 11 months of 2021. It manages a portfolio in excess of $500 million in unpaid principal balance.
“The entire Century team is pleased to be joining Velocity’s family and we look forward to realizing the opportunities this transaction offers to both companies,” Kyle Perry, Century’s chief executive, said in a statement. “Velocity’s national footprint and operational capabilities will significantly expand our ability to grow customer relationships and origination volume.”