Newfi enters into strategic agreement with investment lender

Newfi Lending will begin working with a California real estate investment originator, allowing it to provide funding and help develop the company's business over time.

Newfi's strategic agreement and investment in Los Angeles-based BARH Dunmore, which was established in 2021, opens up "substantial funding capacity" for the latter, as it seeks to build its presence in the residential-transition loan space. Among the offerings of the latter company, which operates under the name Dunmor, are bridge funding, fix-and-flip loans and ground-up construction financing in both single-family and multifamily sectors and are aimed at small real-estate investor businesses.

"We are now set to embark on a new growth phase," said Dunmor founder and CEO Franck Ruimy, in a press release. "These partnerships position us to continue delivering the high level of service our clients expect from us, complemented by even more robust funding solutions at highly competitive rates."

The deal also puts into place a number of goals structured to strengthen cooperation between the two businesses over time. 

"We are excited to partner with Dunmor," added Newfi CEO Steve Abreu. "We continue to be impressed by the leading technology Dunmor has created for the RTL industry."

In a separate agreement reached with an undisclosed offtake partner, Dunmor also said it will be able to secure hundreds of millions of dollars worth of funding capacity to expedite growth.  

Newfi, the multichannel lender based in Emeryville, California, touts its "unique product development" that includes bank-statement and non-QM mortgages. It also offers a debt-service coverage ratio loan option aimed at investors, where potential rental cash flow is taken into consideration in underwriting. It introduced a shared-appreciation second-lien late last year as well. 

Recent research conducted by RCN Capital and CJ Patrick Co. found housing investor sentiment improving this spring, with 42% of businesses in the space expressing optimism about market conditions over the next six months. In its winter survey, the same researchers found only a 39% share with an optimistic view. 

Fix-and-flip investors appeared more content with current and anticipated future conditions than peers offering rentals. Approximately 43% of home flippers believe that the market will continue to improve compared to 32% of rental property investors.

The high cost of financing ranked as the top concern among investors surveyed, with 71% noting it as a major challenge. 

But the real-estate investment community also saw some good news emerge in the first quarter, as new purchases increased annually for the first time in two years after a period of subdued volume, according to separate research from Redfin. 

While fix-and-flip investors may seem more optimistic currently, the single-family rental market may offer more revenue potential, the real estate brokerage said.