Articles

Build-to-Rent Construction Continues Its Record-Breaking Ascent

Increasingly, single-family rental (SFR) operators have been relying on build-to-rent (BTR) development to bridge the housing gap, accelerating the momentum of SFR construction through 2024’s halfway point. Both total SFR/BTR housing starts and BTR’s share of all single-family housing starts reached new record highs in the second quarter, setting the stage for another banner year.

Current Reports

Small Multifamily Investment Trends Report Q3 2024

The small multifamily outlook continues to brighten as more signs indicate a normalization has already begun. In the second quarter, originations activity and borrowing conditions improved as completions sat at a five-decade high, Arbor’s Small Multifamily Investment Trends Report Q3 2024, developed in partnership with Chandan Economics, shows. While the subsector’s fundamentals are trending up, it still has room for growth when interest rate relief arrives.

Articles

Top Markets for Multifamily Permitting in 2024’s First Half

While the overall pace of new multifamily permitting per capita in the U.S. slowed recently, it has picked up momentum in pockets of the country, especially the Midwest. In the first two quarters of 2024, Madison, WI, Columbus, OH, and Omaha, NE, were among the major metropolitan markets posting solid permitting gains, another sign of multifamily’s strength in all cycles.

Analysis

Top U.S. Multifamily Rent Growth Markets — Q2 2024

The U.S. multifamily market followed the quick pandemic contraction with a strong recovery, and has now normalized into a more stable cycle. Demand remained strong across the country, with a wide variety of markets among the leaders for rent growth.

Articles

Affordable Housing Supports Positive Physical and Mental Health

Did you know that more U.S. renters now spend over 30% of their income on housing and utilities than at any other time on record? Limited affordable housing options not only increase the rent burdens of low-income tenants but disrupt physical and mental health, underscoring the need for the creation and preservation of more affordable housing units nationwide. Quality affordable housing adds stability to communities and supports healthier environments that can significantly improve well-being.

Analysis

U.S. Multifamily Market Snapshot — August 2024

After skyrocketing through a boom cycle over the past two years, the U.S. multifamily market settled into a cycle of stabilization in the first half of 2024. Rents held steady, occupancy increased, and vacancy rates remained in line with historical averages, while investor sentiment remained positive.

Articles

Annual SFR CMBS Issuance On Pace to Triple in 2024

Single-family rental (SFR) CMBS issuance saw a sizeable pickup through the first half of 2024, with $4.2 billion in new issuance, placing it on pace to at least triple last year’s annual total.

Articles

Arbor’s Build-to-Rent Financing: 10 Reasons to Choose a Premier Lender

Build-to-rent (BTR), a compelling solution to the U.S. housing market’s evolving needs, is experiencing record growth. BTR accounted for 8% of all single-family rental (SFR) construction starts in the 12 months that ended in the first quarter of 2024, according to Arbor’s Single-Family Rental Investment Trends Report Q2 2024. As the need for quality rental units remains high, borrowers have much to gain from partnering with an experienced lender who specializes in build-to-rent financing.

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FANNIE MAE

Healthy Housing Rewards®, Enhanced Resident Services, and Healthy Design

Arbor’s Fannie Mae Multifamily offers Healthy Housing Rewards, a product feature that provides lower pricing to finance affordable properties with healthy design features. Enhanced Resident Services is a product feature that provides lower pricing to finance affordable properties with enhanced resident services that improve the health and stability of their residents including health and wellness services, work and financial capability support, and more. Healthy Design is a product feature that provides lower pricing to finance affordable properties with health-promoting design and operational features including playgrounds, fitness equipment, tobacco-free environments, green spaces, and more.

Benefits
  • Lower interest rate
  • Healthy Design: Reimbursement for Healthy Design Certification (up to $6,500)
  • Enhanced Resident Services: Reimbursement for initial Sponsor certification (CORES) and Enhanced Resident Services Property certifications
  • Flexible underwriting to specific affordable developments
  • Flexible loan terms, and fixed- or variable-rate financing options
  • Certainty and speed of execution
Eligibility
  • Affordable Housing Properties with at least 50% of the units affordable at 80% of Area Median Income or less
  • Healthy Design: Must obtain Healthy Design certification from an approved Fannie Mae provider.
  • Enhanced Resident Services: Must obtain Sponsor certification and Property-level certification from an approved Fannie Mae provider
  • One-time benefit per borrower per property; Healthy Design and Enhanced Resident Services cannot be combined
Pricing Healthy Design: 15 basis points discount
Enhanced Resident Services: Up to 30 basis points discount
Term 5-30 years
Amortization Up to 35 years
Healthy Design Certification Certification fee is reimbursed up to $6,500 by Fannie Mae
Enhanced Resident Services Certification Sponsor Certification: Cost of initial Sponsor certification is reimbursed 100% by Fannie Mae; Sponsor must obtain recertification every 5 years
Property Level Certification: Initial certification cost of property-level compliance will be 100% reimbursed by Fannie Mae; Borrower must obtain yearly property certification.
Interest Rate Fixed- and variable-rate options available
Maximum LTV Varies by product type
Minimum DSCR Varies by product type
Prepayment Availability Flexible prepayment options are available including yield maintenance and declining prepayment premium
Loan Amount No minimum or maximum
Rate Lock 30- to 180-day commitments. Borrowers may lock the interest rate using Streamlined Rate Lock option. Confirmation of Healthy Design certification or sponsor-level and property-level certifications is required prior to rate lock
Interest Accrual 30/360 and Actual/360
Recourse Non-recourse execution is available, with standard carve-outs for “bad acts” such as fraud and bankruptcy required
Third-Party Reports Standard third-party reports, including Appraisal, Phase I Environmental Assessment and a Property Condition Assessment, are required. Confirmation of Healthy Housing Rewards features and eligibility is required
Assumption Loans are typically assumable, subject to review and approval of the new borrower’s financial capacity and experience

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