Pretium, a real estate investment firm, has provided over $1 billion in loans to homebuilders in the last six months. The company aims to address the housing shortage in the U.S. by financing the construction of nearly 5,000 new homes, targeting smaller builders who struggle to secure financing from traditional banks.

The U.S. is currently short about 3.7 million homes, leading to increased home prices and rents. With banks limiting real estate lending, private capital firms like Pretium are stepping in to fill the gap. Pretium plans to become a major player in U.S. homebuilding financing by 2027, supporting smaller builders who are crucial in addressing the housing shortage.

Pretium’s move to provide loans to homebuilders reflects a trend of private credit players entering areas traditionally dominated by regional or smaller banks. Co-President Jonathan Pruzan highlights the importance of financing experienced builders who face challenges securing loans from traditional sources due to changing lending practices.

Founded by former Goldman partner Don Mullen, Pretium is managed by Co-Presidents Pruzan and Stephen Scherr. The company’s expansion into residential real estate financing signals a shift in the industry, as private capital firms play a larger role in addressing the ongoing housing shortage in the United States.

Read more at Yahoo Finance: Ex-Goldman partner’s investment firm issues $1 billion in homebuilder loans