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Commercial Bridge Loans: Fast, Flexible Financing for Multifamily Investors

With constantly changing market conditions, investors sometimes need access to capital with flexible terms to improve or secure an asset. Commercial bridge loans are a popular financing tool that provides borrowers with short-term capital for renovations and purchases. They are often the perfect first step in the door to the beginning of a long-term financial partnership.

Current Reports

Single-Family Rental Investment Trends Report Q1 2024

On the heels of a strong 2023, the single-family rental (SFR) sector is positioned to expand even more in 2024. Build-to-rent (BTR) starts ticked up in the third quarter to reach 7.8%, another record high. With occupancy rates stable and lease renewal rent growth above historical averages, SFR has healthy fundamentals that will continue to support growth amid headwinds, Arbor’s Single-Family Rental Investment Trends Report Q1 2024, developed in partnership with Chandan Economics, shows.

Analysis

U.S. Multifamily Market Snapshot — Q4 2023

The U.S. multifamily market continued to show signs of slowing at the end of 2023, although demand remained robust, with high home prices leading younger generations of higher-income households to choose renting over homeownership.

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Arbor Recognized as Top Lender by Fannie Mae, Freddie Mac, and FHA in 2023

Arbor’s platform of diverse multifamily financing solutions and our strong industry relationships drive us to the top of the multifamily lender rankings year after year. Through decades-long partnerships with Fannie Mae, Freddie Mac, and FHA, our best-in-class team delivered results for our borrowers in 2023, propelling Arbor to the top of the partner rankings.

Current Reports

Small Multifamily Investment Trends Report Q1 2024

Small multifamily starts the year from a position of strength with normalizing expense ratios and healthy occupancy rates. After demonstrating resiliency amid headwinds, this subsector is ready to capitalize on any positive momentum in the financial markets. Arbor’s Small Multifamily Investment Trends Report Q1 2024, developed in partnership with Chandan Economics, examines and explains the key developments every investor needs to know.

General: 800.ARBOR.10

Fannie Mae® Hybrid Adjustable Rate Mortgage (ARM)

Arbor’s Hybrid ARM product offers a 30-year mortgage loan, comprised of an initial term where interest accrues at a
fixed-rate, after which it automatically converts to accrue interest at an adjustable-rate for the remaining term.

Loan Amount Up to $6 million nationwide
Loan Term 7-year fixed rate term, followed by a 23-year adjustable rate term; or 10-year fixed rate term, followed by a 20-year adjustable rate term
Amortization 30 years
Maximum LTV Up to 80%
Minimum DSCR 1.25x Actual Amortizing DSCR. The maximum loan amount must be determined by using a minimum 1.00x sufficient to cover a debt service constant that equals the sum of (i) the interest rate during the fixed rate term, plus (ii) 2.50%
Rate Lock 30- to 180-day commitments; Borrowers may lock a rate with the Streamlined Rate Lock option
Interest Rate Adjustments Starting in the adjustable-rate period, adjusts based on changes to the underlying index and is equal to the Index plus the Margin
Index During Adjustable-Rate Term 30-day Average SOFR
Margin During Adjustable-Rate Term 1.15%, plus the Guaranty Fee and the Servicing Fee in effect at Rate Lock
Prepayment Availability Flexible prepayment options available during the fixed-rate term, including yield maintenance and declining prepayment premium; no prepayment fees during the adjustable-rate period
Maximum Interest Rate During The Adjustable-Rate Term Starting with the conversion from the fixed interest rate to the adjustable interest rate and thereafter, maximum semi-annual interest rate adjustment of 1% up or down

Maximum lifetime interest rate to Borrower capped at 5% over the initial fixed rate

Lifetime Interest Rate Floor The interest rate will never be less than the Margin
Supplemental Financing Not available
Accrual 30/360 or Actual/360
Recourse Non-recourse execution with standard carve-outs for “bad acts” such as fraud and bankruptcy
Escrows Replacement reserve, tax, and insurance escrows are typically required
Third-Party Reports If underwriting to Small Mortgage Loans, then streamlined inspection and Environmental Screening using the ASTM E-1528-14 protocol, otherwise, standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment
Application Deposit $10,000; Covers estimated processing and legal fees
Assumption Loans are typically assumable, subject to review and approval of the new Borrower’s financial capacity and experience

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