As a partner in the New York City law firm of Treff and Lowy, PLLC, Joseph Treff offers advice to investors on all aspects of real estate financing. Familiar with numerous investment vehicles, Joseph Treff has facilitated a number of conduit financing transactions.
By definition, conduit financing describes the path that funds take from investor to transactions. It allows borrowers to secure the funds that they need for a transaction while the long-term financing undergoes structuring. It has become a common technique for facilitating commercial real estate transactions, which frequently require a larger capital total than residential mortgage lending. A conduit lender grants this capital to the buyer and takes on the responsibility for sourcing investor funding to achieve the final total.
A conduit lender may also use a similar system to fund municipal projects with external managers. This allows the project to get underway and begin to produce revenue, which then goes toward paying back the original loan. Conduit lenders maintain control over the structure of the financing itself, which allows them to provide more flexible financing adapted to the life of a project, while investors gain access to prestructured opportunities.