Articles

Eight Common Commercial Real Estate Investor Questions

Whether you are just beginning your investing journey or are looking to take your portfolio to the next level, Arbor stands ready with our talented team and decades of expertise. Given our vast experience and national footprint of successful deals, we are familiar with many common commercial real estate investor questions, such as the ones answered in this article.

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Multifamily is Well-Positioned for Short- and Long-Term Growth

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Refinance of Existing HUD-Insured Loan

FHA® Interest Rate Reduction (IRR) Refinance of Existing HUD-Insured Loan   Arbor provides this program to reduce the interest rate on qualified existing HUD-insured multifamily loans. The HUD-insured loan remains in place, with reduced payments based on the new rate, the current balance, and the remaining term. The existing prepayment penalty must be paid in full. V041624

Mortgage Insurance for Rental Housing for Urban Renewal and Targeted Redevelopment

FHA®220 Mortgage Insurance for Rental Housing for Urban Renewal and Targeted Redevelopment*   Arbor provides FHA-insured, long-term, fixed rate financing for new construction and substantial rehabilitation of multifamily projects nationwide. This program provides for both construction and permanent financing for projects in urban renewal areas and other areas where local governments have undertaken designated revitalization activities. Applications are typically processed in two stages (preliminary application followed by firm application). Affordable/rental assisted projects and HUDexperienced development teams may request a “straight to firm” application, saving significant time by eliminating the preliminary application stage. V020224

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After the volume of newly issued multifamily permits hit a 37-year high in 2022, multifamily completions surged another 22.3% last year. As the sector continues to gain strength, its growth has remained concentrated in the southern and western regions of the country, according to an analysis of new data from the U.S. Census Bureau’s Survey of Construction.

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The Evolving Characteristics of Multifamily Construction

During the post-global financial crisis (GFC) cycle, a disproportionate share of new multifamily construction was of high-rise units in properties with amenities. However, the tides have turned. The rising cost of homeownership has brought the need for more affordable housing development in the U.S. to the top of many legislative agendas. In this deep dive, our research teams utilize data from the U.S. Census Bureau’s Annual Survey of Construction to show how and why the characteristics of new multifamily properties continue to evolve alongside shifting market needs.

Articles

Video: Growing LGBTQIA+ Visibility in the CRE Industry

LGBTQIA+ Pride Month is recognized in June, but its lessons are timeless. During a recent conversation between Tres Seippel, Director, Construction Management at Arbor, and Dr. Sam Chandan, Founder of Chandan Economics, Founding Director, NYU Chen Institute for Global Real Estate Finance, and Co-Chair of the Real Estate Pride Council, Seippel shared why it is more important than ever for the industry to embrace visibility and show support for employees who identify as LGBTQIA+ or other diverse backgrounds.

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Home | Fannie Mae | Moderate Rehabilitation (Mod Rehab) Supplemental
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FANNIE MAE DUS®

Moderate Rehabilitation (Mod Rehab) Supplemental

Arbor offers subordinate financing options for multifamily properties that have completed moderate rehabilitation.

Loan Amount 5-30 years; must be coterminous with the senior mortgage loan
Amortization Up to 30 years
Interest Rate Fixed and variable rate options available
Maximum LTV Combined LTV as high as 75%, depending upon asset class and use of proceeds; may be higher for Multifamily Affordable Housing properties and assumptions
Minimum DSCR Combined DSCR as low as 1.25x, depending upon asset class and use of proceeds; may be lower for Multifamily Affordable Housing properties
Mod Rehab Supplemental Mortgage Loan Timing Within 36 months of origination of the Mod Rehab first mortgage loan; no one-year waiting period
Benefits
  • The Moderate Rehabilitation Supplemental Mortgage Loan is excluded from the
    one Supplemental Loan rule
  • The loan sizing and pricing is comparable to the first lien mortgage loan
  • Lower cost than refinancing
  • Access to additional capital
  • Certainty of execution
  • Speed in processing and underwriting
Eligiblity
  • Stabilized Conventional, Multifamily Affordable Housing, Seniors Housing,
    Student Housing Properties, and Manufactured Housing Communities
  • First Mortgage Loan identified as Moderate Rehabilitation
  • Existing Fannie Mae fixed-rate or adjustable-rate mortgage loans
  • Arbor must be the servicer of the existing Fannie Mae Mortgage Loan
  • Fannie Mae must be the only debt holder on the property
Rate Lock Standard Rate Lock
Accrual 30/360 and Actual/360
Recourse Nonrecourse execution with standard carve-outs required for “bad acts” such as fraud and bankruptcy
Escrows Replacement reserve, tax and insurance escrows are typically required, based on the resulting tier of the combined preexisting mortgage loan and Moderate Rehabilitation Supplemental Mortgage Loan
Third-Party Reports Standard third-party reports, including Phase I Environmental Site Assessment, and a Property Condition Assessment, may not be required if certain conditions are met
Assumption Loans are typically assumable, subject to review and approval of the new borrower’s financial capacity and experience
Tier Dropping Permitted for fixed rate Moderate Rehab Supplemental Mortgage Loans
Rehabilitation Requirements An average of at least $10,000 per unit of property improvements
Verification of Property Improvements Lender must document all completed rehabilitation work and verify its completion through a site inspection if the work is not performed pursuant to a Completion/Repair Agreement or a Rehabilitation Reserve Agreement

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