HUD Production
I was recently offered a production analyst internship at a top agency-focused brokerage (think Greystone/Berkadia/Walker Dunlop) on their FHA/HUD Finance team. I've read some posts about Agency lending on here but I'm not sure how different working with HUD is. I'm assuming projects will have more red tape to work around---does that mean fees are higher or that deal volume is less and pay is lower than GSE lending? What does the comp progression look like? Will I get pigeonholed into affordable if I take take this? For reference this is for the summer after sophomore year and its already my second internship in affordable/FHA stuff.
Congrats on the internship offer! That's a great step in your career. Now, let's dive into your questions.
Working with HUD can indeed involve more red tape compared to other types of lending. This is due to the nature of HUD loans, which are government-backed and thus come with additional regulations and requirements. However, this doesn't necessarily mean that fees are higher or deal volume is less. It really depends on the specific circumstances of each deal and the overall market conditions.
As for compensation progression, it can vary widely depending on the firm, the market, and your performance. However, based on the most helpful WSO content, a third-year analyst with a private mortgage lender specializing in FHA HUD and FNMA DUS lending could expect a salary in the range of $55,000 + 25% bonus, with the bonus almost guaranteed based on easily reached metrics. Keep in mind that this is from 2008 and the current figures might be different.
Regarding your concern about getting pigeonholed into affordable housing, it's a valid concern. However, having experience in FHA/HUD lending can also open up opportunities in other areas of real estate finance. It's all about how you leverage your experience and skills.
Remember, this is just one monkey's opinion. I'd recommend reaching out to others in the industry to get a broader perspective. Good luck with your internship!
Sources: FHA/FNMA/FHLMC Underwriter, Why not GSE lending? Stigmas?, Differentiation Between Origination and Underwriting In Lender Vocabulary
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