Government Shutdown: What Multifamily Borrowers Need to Know

Unless an 11th-hour agreement is reached, a Congressional impasse will trigger the first partial U.S. government shutdown in four years. Starting October 1, 2023, many non-essential federal government operations will be limited or suspended. Agency lending, however, will not be interrupted, and there is no cause for concern. Borrowers should anticipate some inconveniences, such as processing and closing delays.


Understanding the Impact of Wildfires on Rental Property Insurance

From California to Maui, the frequency and scope of wildfire events are rising, causing insurance markets and public agencies to reevaluate property in areas at risk for catastrophic damage. As a result, rental housing providers are seeing greater limitations to coverage, higher premium prices, and, in some cases, a total absence of viable private insurance — a trend detailed in the NMHC 2023 State of Multifamily Risk Survey and Report. This troubling new trend has placed many rental housing operators in a bind where they must simultaneously contend with the declining availability and affordability of insurance options.


Five Advantages of FHA Multifamily Construction Loans

In the last three years, multifamily construction has reached levels not seen since the 1980s, supported, in part, by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) loans. If you are exploring the acquisition, refinancing, rehabilitation, or new construction of conventional multifamily, affordable housing, seniors housing, or a healthcare facility, consider FHA multifamily construction loans, a stable financing option with excellent terms and many other attractive advantages.


Where are Single-Family Rental (SFR) Rents Rising the Fastest?

While the single-family rental (SFR) sector’s rent growth averages have retreated from record highs, structural tailwinds are keeping price growth positive — both nationally and in major SFR markets. In this research brief, Chandan Economics and Arbor Realty Trust analyze DBRS Morningstar data, which covers the top 20 MSAs by SFR activity, to discover the metropolitan areas where SFR rent growth is the hottest right now.


Fannie Mae Small Loans Cap Raised to $9 Million

Fannie Mae recently announced that its Small Loan cap has increased from $6 million to $9 million for all loans committed as of August 22, 2023. Multifamily borrowers and lenders have praised the change to the Fannie Mae Small Loans program, which will encourage greater investment in a rapidly growing sector where demand remains high despite market volatility.


The Top Five Emerging Metros for Retiree Relocation

As Baby Boomers reach retirement age, their evolving geographic preferences are strengthening housing markets and local economies in new locations, which feature attractive climates, relative affordability, and ample outdoor activities. With swelling populations of senior citizens, our top five emerging metropolitan areas for retiree relocation are fertile ground for multifamily real estate investment.



Green Financing®

Arbor’s Fannie Mae Multifamily suite of Green Financing solutions includes options for acquisition, refinance and supplemental financing. Green Financing solutions create a “triple bottom line” by supporting increased cash flows, better quality housing, and reduced energy and water usage.

Great Incentives
  • Lower interest rate
  • Fannie Mae pays 100% of energy and water audit report; loan must close as Green Rewards
  • Up to 5% more in loan proceeds
  • Increased net cash flow by underwriting projected energy and water cost savings
  • No minimum investment per unit
Minimum Loan Amount $750,000
Loan Term Up to 30 years
Amortization Up to 30 years; interest-only options also available
Minimum DSCR Green Rewards: 1.25 Conventional, 1.20 Affordable

Green Building Certification pricing break: 1.25 Conventional, 1.20 Affordable

Maximum LTV Varies by Asset Class and product type
Rate Structure Fixed- and adjustable-rate options available
Accrual 30/360 and Actual/360
Eligible Properties Conventional, affordable, seniors, military and cooperative properties
nationwide are eligible. A Manufactured Housing Community is eligible only if a Solar PV system is selected as a required efficiency measure. (Manufactured Housing Communities are not eligible); Bborrower must commit to improvements projected to reduce the whole property’s annual energy and/or water usage by at least 30%, of which a minimum of 15% must be attributable to projected savings in energy consumption. Improvements must be installed within 12 months of loan origination.
Eligible Borrower Single asset entity
Occupancy Requirements 85% physical occupancy for 90 days; 70% economic occupancy required
Tax & Insurance Escrows Monthly deposits required
Replacement Reserves Monthly deposits required; underwritten at a minimum $250 per unit per annum; Costs for green efficiency improvements escrowed at 125%
Recourse Non-recourse available, with standard carve-outs for “bad acts” such as fraud and bankruptcy
Commercial Space Maximum 35% of net rentable area and maximum 20% of effective gross income
Assumable Subject to approval and 1% fee
Required Reports Appraisal, Property Condition Assessment, Phase I Environmental and a High Performance Building (HPB) report; Fannie Mae reimburses 100% of the cost for the HPB subject to the loan closing
Prepayment Yield maintenance and other declining prepayment options are available
Subordinate Financing Not allowed without written approval
Pricing Tiered pricing matrix; more favorable terms available for higher DSC and lower LTV
Rate Lock 30- to 180-day commitments; early/extended rate lock options available
Application Deposit $30,500; covers estimated processing and legal fees
Origination Fee Minimum 1%; par pricing available
Good Faith Deposit 2% of loan amount due at rate lock, but refundable
Verification of Property Improvements Property improvements must be completed within 12 months; lender will verify completion of the agreed-upon property improvements; borrower must report the property’s annual energy performance metrics, including ENERGY STAR® score


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