Kushner Cos. Gets $800 Million Federally Backed Apartment Loan

[RandomGuy]

Kushner Cos., the real estate firm owned by the family of President Donald Trump’s son-in-law Jared Kushner, has received about $800 million in federally backed debt to buy apartments in Maryland and Virginia -- the company’s biggest purchase in a decade.

The loan was issued by Berkadia, a lender co-owned by Warren Buffett’s Berkshire Hathaway Inc. and Jefferies Financial Group Inc., in a deal that’s backed by government-owned Freddie Mac, according to a person familiar with the matter who asked not to be named discussing the private transaction.

The arrangement increases the government’s exposure to Kushner Cos. at the same time that its former chief executive officer is one of the most powerful people in the White House. Jared Kushner divested ownership in many of the company’s assets to close family members when he joined the government. Kushner Cos. had more than $500 million in loans from Fannie and Freddie at that time.

https://www.bloomberg.com/news/articles/2019-05-23/kushner-cos-gets-800-million-federally-backed-apartment-loan

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Have fun bankrolling these idiots' businesses. They are going to pay themselves pretty well in the process, to be sure.

[Will Hunting]

Sorry, but this is just bad information and it's a non-story.

Fannie and Freddie make billions of dollars in multi-family loans and this is always how it works, an Optigo lender like Berkadia does the underwriting/diligence/closing and gets a small fee for doing so, while Freddie backs the loan and ultimately securitizes it, which is why this is such a stupid story. The risk of the loan is going to sit on Freddie's balance sheet for a few months at most before it's securitized and sold off, at which point the government carries no more risk.

This simply isn't some sweetheart deal Kushner is getting, and it's not something that the government is taking a substantial risk on financially.

[Winehole23]

Pure coincidence, Kushner divested and has nothing to do with the management of the Kushner Cos.

I'm sure his family members don't discuss it at the dinner table.

It's scurrilous of you to suggest that the Kushner/Trumps are deliberately enriching themselves at the public trough, or that government agencies are doing so to please the President or avoid his wrath.

[Will Hunting]

Pure coincidence, Kushner divested and has nothing to do with the management of the Kushner Cos.

I'm sure his family members don't discuss it at the dinner table.

It's scurrilous of you to suggest that the Kushner/Trumps are deliberately enriching themselves at the public trough, or that government agencies are doing so to please the President or avoid his wrath.
In this particular case, it's a non-story.

Nothing about that article makes it sound like Kushner got any off-market financing from Freddie. It looked like a completely run-of-the-mill multi-family agency loan.

[Winehole23]

Looks like a non-story to me too, but what good fortune for a billionaire developer who just happens to be a close relative of a senior White House advisor, who just happens to be POTUS's son-in-law!

[Winehole23]

We already know Trump tried to muscle DHS into awarding a contract to a ND donor who flattered him on Fox News, you think he would be above doing similar for his own family?

[Will Hunting]

We already know Trump tried to muscle DHS into awarding a contract to a ND donor who flattered him on Fox News, you think he would be above doing similar for his own family?
Do I think he's above it? No, but I don't think it happened here.

Keep in mind, the way agency lending works is that there are extremely rigid underwriting guidelines and form loan documents (some of the cushiest jobs transaction attorneys have are negotiating loan documents for a Fannie/Freddie loan, all they do is basically say these are the form documents Fannie/Freddie use, either sign them with minimal changes or go fuck off), and any major exception to those guidelines would crush the securitization market for that loan. Berkadia is also the one conducting the diligence and determining the appropriate loan size, rate, terms, etc., it's not a deal conducted directly between Kushner and Freddie.

[Winehole23]

Do I think he's above it? No, but I don't think it happened here.

Keep in mind, the way agency lending works is that there are extremely rigid underwriting guidelines and form loan documents (some of the cushiest jobs transaction attorneys have are negotiating loan documents for a Fannie/Freddie loan, all they do is basically say these are the form documents Fannie/Freddie use, either sign them with minimal changes or go fuck off), and any major exception to those guidelines would crush the securitization market for that loan. Berkadia is also the one conducting the diligence and determining the appropriate loan size, rate, terms, etc., it's not a deal conducted directly between Kushner and Freddie.I get all that.

Former WH occupants took more care to avoid the appearance of corruption, these clowns are really pushing the envelope, and not in a good way.

[Will Hunting]

I get all that.

Former WH occupants took more care to avoid the appearance of corruption, these clowns are really pushing the envelope, and not in a good way.
Maybe, but trying to be an investor in multi family properties without access to agency loans would be like fighting with your hands tied behind your back.

I think the whole process is fucked, FTR. The government doesn’t need to be backing 75% LTV non-recourse, fixed rate loans, that kind of stuff is what leads to real estate bubbles.

[Winehole23]

Maybe, but trying to be an investor in multi family properties without access to agency loans would be like fighting with your hands tied behind your back.

I think the whole process is fucked, FTR. The government doesn’t need to be backing 75% LTV non-recourse, fixed rate loans, that kind of stuff is what leads to real estate bubbles.for better and for worse, the real estate market needs GSEs and an explicit public backstop.

[Will Hunting]

for better and for worse, the real estate market needs GSEs and an explicit public backstop.
Yeah I just disagree. I think the real estate market would adapt very quickly without the public backstop.

[Winehole23]

Yeah I just disagree. I think the real estate market would adapt very quickly without the public backstop.You'd have to let banks and market makers fall on their faces in a downturn. I'm not sure there's a politician alive who has the guts to let that happen.

The US has the most robust safety net ever devised...for the finance sector. Gold-plated socialism for the 1%, bootstrap capitalism for the rest of us.

[CosmicCowboy]

Kushner Cos., the real estate firm owned by the family of President Donald Trump’s son-in-law Jared Kushner, has received about $800 million in federally backed debt to buy apartments in Maryland and Virginia -- the company’s biggest purchase in a decade.

The loan was issued by Berkadia, a lender co-owned by Warren Buffett’s Berkshire Hathaway Inc. and Jefferies Financial Group Inc., in a deal that’s backed by government-owned Freddie Mac, according to a person familiar with the matter who asked not to be named discussing the private transaction.

The arrangement increases the government’s exposure to Kushner Cos. at the same time that its former chief executive officer is one of the most powerful people in the White House. Jared Kushner divested ownership in many of the company’s assets to close family members when he joined the government. Kushner Cos. had more than $500 million in loans from Fannie and Freddie at that time.

https://www.bloomberg.com/news/articles/2019-05-23/kushner-cos-gets-800-million-federally-backed-apartment-loan

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Have fun bankrolling these idiots' businesses. They are going to pay themselves pretty well in the process, to be sure.

You cheapen your legitimate complaints when you fabricate stupid shit like this.

[Winehole23]

You cheapen your legitimate complaints when you fabricate stupid shit like this.What did RG fabricate?

Hostile, paranoid inferences like his were your stock in trade for eight whole years, because, Obama.

[Winehole23]

Fast and Furious, Solyndra, Benghazi...the drumbeat of fake doom was yours, CC.

The solemnity of your bid to reposition yourself as a sober centrist is hilarious.

[TeyshaBlue]

Fast and Furious, Solyndra, Benghazi...the drumbeat of fake doom was yours, CC.

The solemnity of your bid to reposition yourself as a sober centrist is hilarious.

As a sober centrist/pragmatic conservative, I agree with CC. Hostile, paranoid references are hostile paranoid references. This used to not be RG's style.

[Winehole23]

As a sober centrist/pragmatic conservative, I agree with CC. Hostile, paranoid references are hostile paranoid references. This used to not be RG's style.Very true.