Articles

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.

Articles

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.

Analysis

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.

GENERAL: 800.ARBOR.10

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FANNIE MAE DUS®

MBS as Tax-Exempt Bond Collateral (M.TEB) – Fixed Rate

Arbor’s MBS as Tax-Exempt Bond Collateral (M.TEB) – Fixed Rate issues MBS that can be used as collateral for either
(i) existing fixed-rate bond refundings, or (ii) new fixed-rate bond issues in conjunction with 4% Low-Income Housing Tax
Credits (LIHTC).

Benefits
  • Faster closings with our unique delegated model.
  • Declining prepayment options or yield maintenance.
  • Interest-only is available.
  • Guaranteed direct pass-through of principal and interest is more attractive to bond buyers.
Eligibility
  • Multifamily Affordable Housing properties.
  • Loans underwritten to Fannie Mae Guide Requirements for tax-exempt bonds.
  • Refundings or new issues with in-place rehab.
  • Immediate delivery or standby forward commitment.
Loan Term 10-30 years.
Amortization Up to 35 years.
Maximum LTV
  • 90% for 4% LIHTC properties with at least 90% of the units meeting affordability requirements.
  • 85% for 4% LIHTC properties with fewer than 90% of the units meeting affordability requirements.
  • 80% for refundings.
Minimum DSCR
  • 1.15x for 4% LIHTC properties with at least 90% of the units meeting affordability requirements
  • 1.20x for 4% LIHTC properties with fewer than 90% of the units meeting affordability requirements for refundings.
Issuer and Trustee Fees Loan sizing must include underwriting of the Issuer and Trustee Fees; however, Issuer and Trustee Fees will be paid directly by borrower and are not enhanced or passed through by Fannie Mae.
Mandatory or Optional Redemption Feature No separate mandatory or optional redemptions outside of the MBS structure.
Prepayment Availability Flexible prepayment options available, including yield maintenance and declining prepayment premium.
Bond Payments Principal and interest payments will be based on a monthly schedule in accordance with the terms of the MBS and will flow through the bond trustee for payment to the bondholder. Payments of principal and interest under the MBS are paid in arrears on the 25th of the month based on the prior month’s accrual; payment to the bondholder occurs on the following business day.
Tax-Exempt to Taxable Conversion Feature If there is a single bondholder, and subject to Issuer consent, the bondholder may pursue an option to redeem tax-exempt bonds and hold the MBS directly.
For 4% LIHTC transactions, this redemption cannot occur prior to the Placed-in-
Service date.
Loan Documents Documented on Fannie Mae loan documents; Issuer must utilize the Fannie Mae form Indenture.
Third-Party Subordinate Financing Hard subordinate debt (which requires scheduled repayment of principal) is permitted only if provided by a public, quasi-public, or not-for-profit lender and combined debt service coverage cannot fall below 1.05x. Soft subordinate debt is permitted subject to requirements which include capping payments at 75% of available property cash flow after payment of senior liens and property operating expenses.
Recourse Non-recourse execution is 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 Standard third-party reports required, including Appraisal, Phase I Environmental Site Assessment, and Property Condition Assessment.

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