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How Big is Small Cap Multifamily?

A closer look at the multifamily housing inventory in the United States and the size of the small cap investment opportunity.

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Multifamily Forecast: Investors Moving to Secondary Markets

The apartment sector has remained the darling of the commercial real estate for the past six years. This doesn’t appear to be changing anytime soon, as 2016 is expected to set a new record for multifamily mortgage origination volume. While multifamily’s position as top dog remains uncontested, savvy investors are altering their strategy for sourcing Read the full article…

GENERAL: 800.ARBOR.10

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 conterminous 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 Non-recourse 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 Pre-Existing 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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