Meridian Returns to Freddie Mac Financing After Ban

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Meridian Capital Group is off the sidelines of the agency financing world.

The once-blacklisted brokerage arranged a $173 million Freddie Mac-backed loan for Rubie Schron at 175 East 96th Street, a luxury multifamily building on the Upper East Side, the Commercial Observer reported. NewPoint Real Estate Capital originated the loan.

The 10-year loan has a 5.07 percent interest rate. It includes eight years of interest-only payments, along with a 40-year amortization schedule.

Meridian’s Matt Texler arranged the refinancing.

This is Meridian’s first deal with either Freddie Mac or Fannie Mae since the agencies blacklisted the brokerage nearly two years ago. A few of its brokers allegedly inflated sale prices on properties to help owners obtain larger loans, leading to the temporary ban for one of the largest Freddie Mac and Fannie Mae brokers of the past decade.

Freddie Mac lifted its ban on Meridian late last year, while Fannie Mae did the same a couple of months ago. The brokerage is set to arrange its first Fannie Mae loan shortly, according to chief executive officer Brian Brooks, who replaced Ralph Herzka in the top job amidst the scandal.

As part of the blacklist being lifted, Meridian added new underwriting procedures with a screening process for all brokeraged transactions. The firm also formed a management credit approval committee to assess large loans.

Brooks estimates the firm will execute roughly $500 million in agency loans by the end of the year, a far cry from the $10 billion executed in 2021, but a start for a firm trying to regain its footing.

“There’s a line in startup land where they talk about how zero to one is a lot harder than one to 10,” Brooks told the Observer. “This is our zero to one loan. We took a year in the penalty box, and now we’re out.

“This [is] our first goal, and once you’re scoring you’re scoring.”

— Holden Walter-Warner