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Linda Pellegrino
Senior Vice President, Rockport Mortgage Corp.
Age: 50
Industry experience: 28 years
With communities struggling to address affordable housing shortages, Linda Pellegrino wants to help property owners preserve and rehabilitate affordable units – not as a developer but as a loan originator. A senior vice president with Gloucester-based Rockport Mortgage Corp., a firm specializing in Federal Housing Administration (FHA) financing, Pellegrino structures and originates mortgages insured by the U.S. Department of Housing and Urban Development for affordable housing projects. Most of her projects are located in the Northeast, though she works throughout the country.
Pellegrino joined Rockport Mortgage in 2002 and is a board member of the National Leased Housing Association, an advocate for the affordable housing industry. The Institute of Real Estate Management’s New England chapter honored Pellegrino earlier this month as Professional Woman of the Year for her leadership and commitment to the industry.
Q: How did you get involved with FHA lending?
A: I started my career right out of college in the asset management division of the Office of Multifamily Housing at HUD back in 1991. I was an asset manager responsible for overseeing a portfolio of FHA-insured and subsidized multifamily loans. I left HUD after about eight years and continued to work with owners of affordable housing properties that participated in various HUD preservation initiatives. I realized it was a natural fit to get into the FHA lending business since many of the owners I worked with used FHA financing in connection with their preservation transactions.
Q: How does FHA lending differ from other types of lending?
A: I view FHA as a niche business because it really does require in depth understanding of both the FHA loan programs and the various underlying affordable housing programs, subsidies and restrictions that go along with them. We’re not doing just financing. We’re working with owners to help them complete overall transactions.
Q: What is your role as the loan originator?
A: There are so many opportunities for owners of these affordable housing properties to really maximize the value of the property by taking advantage of HUD’s preservation initiatives. Not everybody is aware of what the programs can do and the benefits to owners who participate in those initiatives. When I look at a property and at all the underlying restrictions that are on the property – the types of subsidies, the type of Section 8 contract, whether they have restrictions on their cash flow, where are the rents relative to market [rates] – I take a look at all that and then present the owner with a plan. At the end of the day, these projects end up with long-term affordability commitments, extended use agreements and long-term Section 8 contracts. But these properties also all end up getting rehabbed. The owners get the benefit of market-rate rents, cash flows and market-rate returns. And the federal government gets high-quality affordable housing for its residents. It’s a win-win situation.
Q: What are some challenges working with FHA loans?
A: The main challenge is staying on top of all the changes in HUD’s policies that govern their loan programs and the various preservation programs. These policies change frequently based on the evolving priorities of the current administration and the implementation of these initiatives. We spend a lot of time focusing on these changes and determining how we can maximize the benefit for the owners or mitigate the impact of these changes. It’s like a living, breathing thing. Each transaction requires a lot of customization. The fun part for me is when there’s new legislation, programs or initiatives, and you have to figure out a way to really maximize the benefit for owners while getting long-term affordability. It’s like a jigsaw puzzle – you’re constantly figuring out how to get different pieces to work and coming up with new structures.
Q: What’s a memorable project you’ve worked on?
A: The most memorable project I have is called Selis Manor. It was a 205-unit subsidized high-rise in Manhattan, and it serves residents who are blind, visually impaired and physically disabled. We provided a $65 million loan under FHA’s Section 221(d)(4) program, and that was the sole source of funding for that transaction.
We worked with the nonprofit owner to maximize the rents and extend the Section 8 contract to fund the substantial rehab of the project. It incorporated all sorts of cool technology and redesigned units and spaces that were customized for the unique needs of these residents. They had a blind architect who acted as a consultant to the primary architect in helping to design the renovation.
I just recently attended the celebration marking the completion of the project, and it was awesome to see how happy and appreciative the residents were and how great the project turned out – definitely a unique and neat project.
Q: What is your perspective on the state of affordable housing?
A: We need to first and foremost preserve the existing affordable housing stock that we have, and as an industry continue to advocate for programs that provide owners with the right incentives to commit to long-term affordability. It’s also critical that our industry continues to lobby for more funding at both the federal and state level to produce new affordable housing. That’s definitely challenging, especially in the Northeast, because of the cost of construction.
Owning affordable housing is not an easy business. Owners should be incentivized to stay in this business and maintain high-quality housing. There are so many good owners out there, and it’s an important job that they do.
Q: What was your reaction to being named IREM New England’s Professional Woman of the Year?
A: A client had nominated me, and I was incredibly surprised and of course humbled. It’s cool to be recognized by my industry colleagues for doing what I love to do.
Pellegrino’s Five Favorite Ways to Relax and Enjoy Life
- Playing with her labradoodle, Winston
- Soaking up the sun at the beach
- Drinking wine with family and friends
- Listening to live music
- Dancing the night away
