Current Reports

Affordable Housing Trends Report Spring 2024

As housing costs spiral, rental affordability has become a more urgent issue, burdening a greater number of Americans. Arbor’s Affordable Housing Trends Report Spring 2024, developed in partnership with Chandan Economics, examines the major policies and programs shaping the marketplace at a time when overdue federal funding expansions have increased agency budgets.


What Is Driving Lifestyle Renter Demand?

Lifestyle renters — those who have the means to own but prefer to rent or are willing to pay more for apartments with amenities — have become a key driver of rental demand in single-family rental homes, build-to-rent communities, and other types of high-quality multifamily housing. With this small yet influential demographic growing, our research teams examine and explain the factors driving lifestyle renter demand.


Build-to-Rent Well-Positioned to Fill Housing Market Gap

With nearly one-fifth of multifamily properties now over 65 years old, it’s time to consider solutions for rejuvenating the rental housing stock in the U.S. While building rehabs are a tried-and-true solution, build-to-rent (BTR) is an alternative that is well-positioned to expand as Americans increasingly favor renting over homeownership.


U.S. Added 514,000 New Rental Households in 2023

In a year when inflation and elevated interest rates weakened affordability, the rental housing sector strengthened and expanded. An analysis of newly released U.S. Census Bureau Housing Vacancies and Homeownership data shows the number of rental households climbed in 2023.

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Structured Adjustable Rate Mortgage (ARM)

Arbor’s DUS Structured ARM product offers increased proceeds over the fixed-rate product with a lower initial interest rate. With an easy-to-use conversion feature, Arbor’s DUS® ARM product gives owners an attractive option in a higher interest rate environment.

Loan Amount $25M minimum, but flexible depending upon sponsorship
Loan Term 5, 7 or 10 years
Amortization Up to 30 years
Minimum DSCR 1.00 at UW Variable Rate; 1.25 at SARM Pay Rate
Maximum LTV Up to 75%
Rate Structure Priced off the one-month SOFR or three-month SOFR. Convertible and nonconvertible options available
Eligible Properties Existing, stabilized Conventional; Multifamily Affordable Housing; Seniors Housing; Student Housing; and Manufactured Housing Communities
Eligible Borrower Single Asset Entity
Occupancy Requirement 85% physical occupancy, 70% economic occupancy
Interest Rate Cap Structured ARMs have no built-in periodic or lifetime caps; instead, the Borrower must purchase an interest rate cap from an approved interest rate cap provider.
The term of the initial interest rate cap need not be equal to the term of the Mortgage Loan, but must be for at least 5 years.
If the Mortgage Loan term is longer than the interest rate cap term, the Borrower must escrow monthly for the purchase of the next interest rate cap.
Tax & Insurance Escrows Monthly deposits required
Replacement Reserves Underwritten at a minimum $250 per unit per annum
Recourse Non-recourse with standard carve-outs
Commercial Space Maximum 35% of net rentable area and maximum 20% of effective gross income
Required Reports Appraisal, Property Condition Assessment, Phase I Environmental
Prepayment Lockout for one year followed by a 1% prepayment premium or declining prepayment premium option
Assumable Subject to approval and 1% fee (non-recourse loans only)
Subordinate Financing Not allowed without written approval
Supplemental Loans Not permitted prior to conversion to fixed rate
Pricing Tiered Pricing Matrix. More favorable terms available for higher DSC and lower LTV
Rate Lock 30-day commitments are available
Application Deposit $20,500; covers estimated processing and legal fees
Origination Fee Minimum 1%, par pricing available
Good Faith Deposit 2% of loan amount


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