The persistent housing shortage in the United States, combined with a decline in lending from traditional financial institutions, has created an opportunity for smaller private equity firms like Pretium to step in and play a larger role in financing the housing sector.
According to estimates by Freddie Mac, there is a deficit of approximately 3.7 million housing units in the U.S. Such shortages can drive up prices and rents while restricting labor mobility.
Pretium stated that its $1 billion loan program is expected to help finance the construction of nearly 5,000 new homes. The company aims to become one of the largest lenders to the U.S. housing construction sector by 2027.
This development signals how private credit providers are expanding into lending areas previously dominated by regional or smaller banks.
“These smaller builders construct half of the homes built annually in the United States and are critical to addressing the housing shortage we face. They are the customers we seek to finance,” said Co-Founder Jonathan Pruzan in an interview with Reuters.
“These are experienced, specialized borrowers who are much more challenged in securing financing than they were two, four, or five years ago when they were funded by smaller or regional banks.”
Mullen founded the company in 2012 after serving as a partner at Goldman Sachs. Pretium’s co-chairs include former Morgan Stanley Chief Operating Officer Jonathan Pruzan and former Goldman Sachs CFO Stephen Scherr.
