FANNIE MAE DUS®
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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