MFA Financial, a mortgage real estate investment trust, has entered an agreement to acquire business-purpose loan originator Lima One Capital.
MFA already holds a minority stake in Lima and plans to acquire all of the remaining ownership interests in the lender and its affiliated entities. The deal includes Lima One’s operating platform and $1.1 billion servicing portfolio, as well as approximately $200 million of related financial assets.
The acquisition, which is the culmination of a multi-year partnership between the firms, is expected to boost MFA’s business purpose loans (BPLs) investment strategy.
“Business-purpose lending is one of the most attractive investment opportunities we see within residential credit, but these high quality, high yielding credit assets are difficult to originate on a primary basis and difficult to source on a secondary basis,” said Gudmundur Kristjansson, co-chief investment officer at MFA.
Founded in 2011, Lima One offers a wide variety of products, including fix-and-flip and new construction loans, single and portfolio rental property loans, and stabilized and value-add multifamily property loans. Since its inception, the company has originated over $3 billion in loans across its product suite.
Lima One’s executive leadership team will continue to lead the business after the transaction is complete, and its operating platform will remain in Greenville, SC.
“Our team has built a best-in-class platform with a strong culture and brand, and we are excited to take this partnership to the next level by fully combining our respective capabilities,” Lima One CEO Jeff Tennyson said. “Demand for all of our products has never been greater, and joining MFA will expand our ability to compete and be the first call for real estate investors.”
“We are pleased to acquire the Lima One platform and to welcome the entire Lima One team to MFA,” said Craig Knutson, CEO and president of MFA. “Our partnership with Lima One has been a core element of launching and growing our BPL investment strategy, and completion of this transaction will significantly enhance our combined presence and ability to deploy capital into the BPL sector.”