Current Reports

Top Markets for Multifamily Investment Report Spring 2025

Arbor’s Top Markets for Multifamily Investment Report Spring 2025, developed in partnership with Chandan Economics, is your roadmap to the best locations to deploy capital. Based on the findings of our exclusive Multifamily Opportunity Matrix, this in-depth analysis assesses economic strength and market capabilities to navigate evolving conditions of the top 50 largest U.S. metros.

Research

Arbor’s data-driven articles and research reports empower multifamily and single-family rental investors and developers to make more profitable financial decisions.

Articles

Renters Account for Majority of Household Growth

The number of rental households climbed nearly 2% last year, as 848,000 more households became renters, an analysis of the U.S. Census Bureau’s Housing Vacancies and Homeownership Survey shows (Chart 1). Rental households also hit a new high of 45.3 million, accounting for more than half of all U.S. household growth in 2024. Weakening affordability, evolving lifestyle preferences, and a limited supply of quality housing all contributed to surging multifamily and single-family rental (SFR) demand.

Articles

Solar Panel Usage Accelerates in Rental Properties

Solar panel installations, which skyrocketed in the U.S. over the last half-century, are projected to double to 10 million in just six years. While installations soared in all types of residences, owner-occupied properties significantly outpaced rentals. However, the evolving economics of solar power may be approaching a tipping point for single-family rental (SFR) operators looking for a differentiator.

Analysis

Small Multifamily Investment Snapshot — March 2025

Amid ongoing macroeconomic uncertainty, the small multifamily sector remains favorably positioned for stability as the structural need for affordable housing in the U.S. has supported the strength of the sector’s demand profile.

Articles

Top Markets for Rental Occupancy

Nationally, vacancies have risen, but the performance of rental housing is extremely localized. Out of the 75 largest U.S. metropolitan areas, the occupancy rate for all types of rental properties, including single-family rentals, 2-4 family, multifamily, and mobile homes, increased in 36 markets last year, while exceeding 95% in nearly one-third of all markets, according to an analysis of newly released U.S. Census Bureau data.[1] From Grand Rapids, MI, to Columbia, SC, the top markets for rental occupancy show where conditions are tightest and demand is strongest.

General: 800.ARBOR.10

Home | FHA 223(f)
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FHA® 223(f):

REFINANCE, ACQUISITION, OR MODERATE RENOVATION

Arbor provides FHA-insured, long-term, fixed-rate financing for refinance, acquisition or moderate renovation of multifamily projects nationwide. Arbor uses the single-stage Multifamily Accelerated Processing (MAP) Program to expedite underwriting and approval.

Loan Term & Amortization Up to 35 years, not to exceed 75% of the remaining economic life (Fully Amortizing).
Minimum DSCR 1.176x for Market Rate properties, or LIHTC restricted whose rents are < 10% below market; 1.15x for LIHTC restricted properties with rents at least 10% below market; 1.11x for properties having at least 90% rental assistance contracts.
Maximum Loan to Value/Acquisition Cost 85% for Market Rate properties, or LIHTC restricted whose rents are < 10% below market; 87% for LIHTC restricted properties with rents at least 10% below market; 90% for projects with 90% or greater Rental Assistance.
Fixed Rate Yes
Eligible Properties Existing Multifamily projects at least three years old. Detached structures and row houses eligible. Market rate, low-to-moderate income and subsidized multifamily properties.
Eligible Borrower Single Asset Entity (for profit or non-profit).
Occupancy Requirement Average 85% occupancy for the 6 months prior to HUD application submission. Maximum economic underwriting occupancy of:

  • 93% for market rate properties (i.e. at least 20% market rate units, or LIHTC whose rents are < 10% below market rents).
  • 95% for LIHTC restrictions on at least 80% of units at rents at least 10% below market.
  • 97% for properties having at least 90% rental assistance, or 90% LIHTC set aside with rents at least 10% below market.
Cash Out Cash out allowed when 80% of value exceeds existing debt plus transaction costs, but only 50% of the net cash will be released at closing. The remaining 50% will be held in escrow until all required repairs are completed. A potential waiver is available to reduce holdback to 25%.
Tax & Insurance Escrows Monthly deposits required.
Recourse Non-recourse, subject to HUD Regulatory Agreement.
Commercial Space Maximum 25% of net rentable area and maximum 20% of effective gross income; minimum 10% underwritten vacancy.
Required Reports Borrower is responsible for all required report costs, included but not limited to: Appraisal, Market Study, Environmental Phase I, Phase II (if applicable), and PCNA. Pre-1978 properties may require lead-based paint and asbestos- containing material testing. Projects 30 years of age or older may require additional testing. Costs can be reimbursed from loan proceeds at closing.
Prepayment Typically 10% year 1, declining 1% per year. Other pre-payment options available subject to market conditions.
Assumable Subject to Arbor and HUD approval and payment of assumption fee.
Good Faith Deposit Negotiable based on project type and loan size.
Expense Escrow Yes – sufficient to cover Arbor’s expenses and third-party report costs.
Origination Fee Negotiable
HUD Application Fee Non-refundable fee of $3 per $1,000 (0.3%) of the mortgage amount due to HUD upon application submission.
HUD Inspection Fee $30 per unit when repairs are less than $3,000 per unit. If above $3,000 per unit, 1% of the total cost of the repairs.
Legal/Closing Fee Borrower pays Arbor’s Counsel Fee and miscellaneous closing costs.
Rehabilitation Qualifications Repairs cannot exceed $15,000 per unit (adjusted for local high-cost factor). Repairs/replacements are also limited to one major building component.
Davis Bacon Not applicable to this program.
HUD Mortgage Insurance Premium HUD sets the cost of the FHA Insurance. The initial MIP is 1% of the loan amount due to HUD at closing. Annual MIP rates:

  • Market Rate Properties: 0.60%
  • Affordable Properties: 0.35%
  • Broadly Affordable or Energy Efficient Properties: 0.25%
  • “Green” energy efficiency achievement): 0.25%

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