Video: Special Report Fall 2023 Key Takeaways

In this video, Dr. Sam Chandan, Founding Director of the C.H. Chen Institute for Global Real Estate Finance at the NYU Stern School of Business and non-executive chairman of Chandan Economics, details the key takeaways of Arbor’s Special Report Fall 2023, which he co-authored with Ivan Kaufman, Chairman and CEO of Arbor Realty Trust.


FHFA Loan Caps for 2024: What Multifamily Borrowers Need to Know

The Federal Housing Finance Agency (FHFA) announced a $10 billion rollback of Fannie Mae and Freddie Mac’s volume cap for loan purchases for 2023 to $140 billion ($70 billion for each agency). This move aligns with industry expectations, given the anticipation of continued headwinds for the multifamily in 2024. Next year’s cap for the Government-Sponsored Entities (GSEs) is a reduction of approximately 7% from the $150 billion limit set for 2023 and a return to the level it was in 2021.

Current Reports

Affordable Housing Trends Report Fall 2023

With the cost of living climbing, the need for affordable housing has become more urgent. Although demand continues to outpace available supply, multifamily investment in affordable housing is fortified by Low-Income Housing Tax Credits (LIHTC), Project-Based Section 8, and the Housing Choice Voucher (HCV) programs. Arbor’s Affordable Housing Trends Report Fall 2023, developed in partnership with Chandan Economics, examines the supply-driven programs and policies designed to improve supply at a point in time when federal gridlock has stalled many funding increases.

Current Reports

Small Multifamily Investment Trends Report Q4 2023

Arbor’s Small Multifamily Investment Trends Report Q4 2023, developed in partnership with Chandan Economics, is a snapshot of a strong and resilient subsector continuing to navigate ongoing market dislocation. The report shows that distress has remained limited, even with valuations and measures of risk pricing in flux. As conditions start to stabilize, there are signs that deal activity is picking up.


U.S. Multifamily Market Snapshot — Q3 2023

The U.S. multifamily market held steady during the third quarter of 2023, as high mortgage rates and a lack of inventory in the housing market continued to drive rental demand.



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 coterminous 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
  • 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
  • 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 Nonrecourse 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 preexisting 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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