Cyprus, Ocean Development In Strong Position On Potential Multifamily Finance Changes

Proposed changes to multifamily housing finance could make it even easier to find funding maintain growth

. In a newly released white paper, the Mortgage Bankers Association (MBA) is pitching a new government-backed, risk insurance program that could do for multifamily housing investors like Cyprus and Ocean Development, what the Federal Deposit Insurance Commission (FDIC) has been doing for average citizens.

The proposal, which came out of the MBAs GSE Multifamily Task Force, aims to redefine the role of Government Sponsored Entities like Freddie Mac and Fannie Mae and encourage private investment in multifamily housing. The plan would fund a government-backed risk insurance program with risk-based premiums paid by loan securities companies. Regulated entities would then issue government-backed multifamily securities.

The goal, according to Brian Stoffers, President of CBRE Debt and Equity Finance and GSE Multifamily Task Force Chairman, is to support development of workforce rental housing government-speak for low-income housing.

Ocean Development, which was founded by current owner Amy Cyprus, and her husband Kip Cyprus, has become a powerhouse in L.A.s multifamily housing market over the last few years. Together with its sister company, Ocean Properties, Cyprus and Ocean Development manage more than 700 units in over 300 properties many under the Housing and Urban Developments (HUD) Section 8 designation. Additionally, Ocean Development has controlling interest in 75 percent of those properties, with private investors holding the remaining share.

And now it would appear that the MBA, and the rest of the market, is playing catch up.

Cyprus and Ocean Development have been ahead of the multifamily housing trend for some time, because they recognized that people were moving out of the suburbs and into the cities in search of shorter commutes and lower housing costs. Moreover, Ocean Development filled that niche by not settling for qualified Section 8 housing. Instead, the company held fast to the belief that affordable housing didnt have to be run down.

That belief comes from Amy herself, as well as her husband Kip. When they married in 1991, they bought, renovated and sold properties for profit. They recognized that quality mattered, and it made them a success. Over the years, Amy and Kip have both worked in aspects of the business, and both have remained dedicated to developing and managing quality housing at affordable rates something that can be hard to find in South L.A.

Whether or not Cyprus and Ocean Development would benefit from the task forces proposed program remains to be seen. But, its clear they already have a head start.

by: Gavin Cameron

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