Carmel-based Merchants Capital has unexpected year of growth amid pandemic


The year 2020 turned out to be one of growth for Carmel-based Merchants Capital, as the mortgage banking company recently announced it provided approximately $4.7 billion in financing during the year. Approximately half of the lending supported affordable housing preservation and development.

CIC DOUGH 0330 Merchants Bank 2020 Dury

The announcement came as some lenders are scrambling to cope with the financial fallout from the COVID-19 pandemic. Initially, Merchants Capital leaders thought they might face a tough year, too.

“For the first 60 days when the pandemic hit, I was on the phone all day, every day, talking with clients about what they thought their collections could drop to, and if it dropped, what we would do,” said Mike Dury, president and CEO of Merchants Capital.

Dury and his team worked feverishly to develop a plan to handle a possible shortfall caused by plummeting rent payments, but they didn’t end up needing it.

“We were bracing for the worst,” Dury said. “It was very surprising. Collections didn’t drop hardly at all, in multi-family, especially.”

Dury credits COVID-19 relief measures with helping renters make payments to landlords, who were then able to make their payments to Merchants. Merchants also was helped by being a niche bank that focuses on multi-family, affordable, senior and student housing and doesn’t make loans on retail centers, malls or hospitality projects, all of which were hit especially hard by the pandemic.

Merchants Capital reported a total year-over-year production increase of 106 percent, with Federal Housing Administration lending remaining steady and Government-Sponsored Enterprise lending through Fannie Mae and Freddie Mac increasing 104 percent. The company’s bridge loan product increased more than 100 percent in 2020.

Dury is confident of another year of growth in 2021. He said the federal government in late 2020 passed legislation to support the development and preservation of affordable housing, making it more financially feasible.

“We think that will allow us to help provide more affordable housing all over the country,” Dury said. “If you thought we needed (affordable housing) pre-pandemic, post-pandemic it’s desperately needed. We think that’s going to stay really active, and that’s where we play.”

One of Merchants Capital’s affordable housing developments is part of North End, planned on 27 acres northeast of Smoky Row Road and U.S. 31. Dury said affordable housing has been a focus for the company since its founding nearly 30 years ago.

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