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Last week, business-purpose residential mortgage lender Dunmor announced that it received a minority equity investment from Newfi Lending, a nonagency mortgage lender owned by funds managed by Apollo Global Management.
Dunmor CEO Franck Ruimy spoke with HousingWire‘s Sarah Wolak on why he anticipates 2025 will be a strong sales year, and he highlighted the recent growth for the business-purpose lending (BPL) sector. Ruimy noted that the BPL sector accounts for a significant portion of residential mortgage originations, with large investors increasingly turning to BPL lenders like Dunmor.
This interview has been edited for length and clarity.
Wolak: The Dunmor and Newfi partnership was announced last week. What does this mean for the residential real estate sector and how business-purpose mortgage lenders are trying to expand?
Ruimy: The transaction was completed with Apollo Global Management. Apollo has 16 lending platforms in the U.S. and one of them is Newfi, which is a non-QM lender. Apollo orchestrated this transaction and now our partnership through Newfi provides the financing needed to grow this business and scale it to a higher level.
Wolak: Can you tell us a little bit about what the partnership is looking like so far?
Ruimy: The way the partnership looks right now is that Newfi has a minority stake in Dunmor and also is part of the [joint venture]. Newfi and Apollo provide us with a full financing structure with a takeout solution, whereas all the production that we have at the moment is funded by Apollo and Newfi, and then we sell some of that production to Athene, which is the Apollo-merged insurance company. It’s a complete financing solution that helps us ramp up and scale our production in the BPL sector.
Wolak: The press release of the deal noted that the residential real estate investment sector is on the brink of explosive growth. Could you share how this move puts Dunmor at the forefront of that?
Ruimy: The BPL sector is a very fragmented industry with a lot of different players. … The trend over the last few years of banking financing retreating from this sector, I think it opened up a lot more opportunities for BPL lenders to be the at the forefront of the funding solution to residential developers and investment.
I think [about] five years ago, banks were still extremely active in the sector. Private credit now has taken over and replaced the banks in facilitating much faster than bank-closed financing, and providing competitive terms and rates to those borrowers
Wolak: Real estate investors are responsible for about one-quarter of all home sales. Would you say that the majority of these are smaller investors?
Ruimy: I would say some large investors that would do $100 million to $300 million a year of loan origination are now clients of those BPL lenders. And you’re going to see more and more growth for what we call tier-five borrowers — the top-tier borrowers coming to the BPL sector for financing solutions. But it’s been like this for years; there’s nothing new. They’re just expanding as banks have been less and less active in the sector.
Wolak: Do you see any of this changing in 2025?
Ruimy: The last two years, we have seen a pretty serious downturn in construction financing and also in the volume of residential sales [because] the high interest rate environment impacted the residential sector. The last two years had a negative impact on our business as well. So, it’s been an interesting time where I see now in 2025 that sales volumes are picking up for ground-up construction.
Multifamily developments have been picking up with a very strong start. So, those are all indications showing that 2025 will be a stronger year for the housing market, especially for the BPL sector. We still see a more modest advance for new single-family home construction. I think that mortgage rates will persist to stay high through at least 2026, and while we think that it’s going to slightly affect sales and refinancing, I think developers have incorporated those higher rates in their models.
Wolak: Dunmor is trying to continue expanding as a leader in the high-quality residential mortgage origination space. Besides your partnership with Newfi, can you talk about how Dunmor is planning on tackling that?
Ruimy: Our group today has over 60 employees and is probably one of the most talented teams that you can find in the industry. What we created here is a tech-enabled platform that can land in every state in the U.S., as we’re licensed pretty much in every state.
So, we’re looking at really expanding our reach across multiple MSAs (metropolitan statistical areas). To do that, we have developed a technology and data system that we integrated to create for our team a platform that can originate loans and manage them — and provide excellent feedback to our brokers and investors — with real-time market data.
We have also created a portal for the broker, where the brokers can also enter information about their borrowers, and also they can even prequalify them through the same process where they can get an instant quote for their borrowers without even talking to us. Through our AI system, our platform can tailor a risk assessment mode. And through our partnership with Newfi and Apollo, we do have all the funding capacity to scale it up.
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