Velocity Financial has acquired a majority stake in mortgage financing firm Century Health & Housing Capital, a move that expands Velocity’s commercial mortgage product offerings through a new channel and products.
According to MarketScreener, Velocity completed the acquisition of an 80% stake in Century for $12.8 million.
Century Health & Housing Capital was founded in 1992 and is a licensed provider of government-insured Federal Housing Administration mortgage financing for multifamily, senior housing, long-term care and assisted living facilities.
The New York-based company originates loans through its own channel and services those loans through an in-house platform.
Century issued $158 million in unpaid principal balance of loans for the 11 months that ended Nov. 30 last year, and manages a servicing portfolio in excess of $500 million in unpaid principal balances.
“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,” Perry added.
Velocity is a vertically integrated real estate finance firm that provides financing solutions for 1-to-4-unit residential rental and small commercial properties. Velocity was founded in 2004.
The firm’s loans are originated on a national basis through a network of independent mortgage brokers.
Velocity principals said the deal would be beneficial to its earnings and have minimal impact on book value.
The company added in a statement that Century’s government-insured product focus acts as a natural hedge through market cycles.
“We are very excited to partner with a proven leader in Kyle and accelerate the growth of the Century platform in this important lending segment. We believe the long-term demographic trends will be a strong tailwind for the health care lending area in particular,” Chris Farrar, president and chief executive of Velocity, said in a statement.
“The ability to offer government-insured products to our brokers will drive incremental origination growth and enables further expansion of our product menu in the future,” Farrar added.
Shares of Velocity traded above the $13 mark at the start of last year before finishing the year at $9.65 per share. In the third quarter of last year, the company missed expectations by $2.79 million, reporting $24.9 million in revenue.