Lenders Are Ramping Up Builder Divisions To Capture Purchase Share

Mortgage lenders are increasingly formalizing or expanding their homebuilder divisions as they look to capture a larger share of the purchase lending pie, even as broader housing activity remains uneven.

CrossCountry Mortgage (CCM) launched a dedicated builder division in March, positioning it as a way to deepen relationships with homebuilders while gearing products for new-home buyers, a move that CEO Ron Leonhardt called a “strategic investment.”

In an interview with HousingWire, Leonhardt elaborated that the move is an expansion aimed at aligning more closely with builders as new construction accounts for a growing share of available housing inventory.

“It’s designed to support both builders and CCM loan officers, giving builders a reliable mortgage partner and helping loan officers win more purchase business tied to new construction, without taking over their relationships or deals,” Leonhardt said.

The division, led by executive vice president Damien Mercer, offers a range of financing products, including construction loans, bridge loans, fix-and-flip financing and forward commitments.

Capitalizing on opportunity

At the same time, other lenders are building out similar efforts.

Guaranteed Rate Affinity (GRA) is a joint venture between Rate and Anywhere Integrated Services that already had a national builder division. It recently tapped Kevin Ginsburg to lead the division with the purpose of “expanding builder partnerships across Guaranteed Rate Affinity and its real estate partner, Coldwell Banker.”

In an interview with HousingWire, Ginsburg said his promotion reflects what he described as a broader industry shift toward treating builder business as a core pillar rather than a side channel.

“A healthy balance of builders in any company should be maybe around 15% to 20% of your overall retail book of business,” Ginsburg said. “In a lot of our markets … we’ve got the opportunity that’s there, but we’re just not fully taking advantage of it.”

Ginsburg, who has spent roughly two-thirds of his career in builder-focused roles, said many lenders have historically captured builder business opportunistically rather than through a defined strategy. The creation of formal divisions signals a shift toward more intentional growth.

“I think what happens is, you do some of this [builder] business on accident,” he said. “The idea of doing this was for us to focus on our strategy … not just within growing it through those relationships, but also growing it for the entire retail enterprise.”

The renewed focus on builder partnerships comes despite a recent slowdown in new home sales compared to prior years. But neither CCM nor GRA are discouraged by these headlines. 

“The timing reflects the growing role builders play in today’s housing market,” Leonhardt said. “Across the U.S., new construction now makes up more than one-quarter of homes currently for sale.”

Ginsburg pointed out that conditions vary widely by region and are being shaped by elevated levels of unsold inventory in some markets. For example, builder activity remains concentrated in Sun Belt states and in high-growth regions, particularly in Texas, Florida and Arizona.

“There’s a whole lot of specs that have been built over the last couple of years, and builders actually have inventory,” he said. “What I think a lot of mortgage companies are looking at is, do we have solutions to help them move their inventory?”

As a result, products such as forward commitments and long-term rate locks are gaining popularity as key tools to help builders. This is particularly true for small and midsize firms looking to compete with larger, publicly traded builders, Ginsburg said.

Under forward commitment structures, lenders effectively provide builders with access to below-market financing in bulk, which can then be used to market lower mortgage rates to buyers.

“We’re basically selling them blocks of money … at below-market interest rates,” Ginsburg said. “It allows them to compete on par with their large competitors out there.”

Beyond rate-focused products, lenders are also expanding into alternative financing solutions to address gaps in the market. At GRA, more than 40% of production last year came from products that did not exist two years earlier, Ginsburg said, a testament to GRA’s commitment to “solve a product or service gap.”

Meeting demand

As lenders expand nationally, scale and consistency across markets are becoming more important. Ginsburg said large, multistate builders value partners who understand their operations and can deliver standardized solutions across regions.

“National companies taking on builder business is all about scale,” he said.

On the flip side, lenders are trying to access all touch points of the housing industry. To boot, competition is intensifying as these lenders chase a smaller origination market than during the heydays of 2020 and 2021.

“I think you’ll see more of this,” Ginsburg said. “There were tons of builder divisions until there weren’t … and now focusing on builder again as one of the legs of the stool of your business.”

“Mortgage is a copycat league,” he added. “When companies see other companies doing this … you’re going to see people that all want to dive into the similar spaces, because it’s where the opportunity is.”