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.

Articles

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.

Articles

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.

Articles

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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Home | Fannie Mae | Unfunded Forward Commitment
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FANNIE MAE®

Unfunded Forward Commitment

 

Arbor offers an unfunded forward commitment to issue an MBS upon completion of construction and conversion to a permanent mortgage loan for multifamily affordable properties. The MBS as Collateral for Tax-exempt Bonds (M.TEB) execution is an available option for 4% LIHTC transactions.

BENEFITS
  • Protection from interest rate volatility by locking the interest rate and other key provisions prior to construction
  • Single asset security allows for customized loan structures
  • Certainty and speed of execution
  • M.TEB execution offers reimbursement of certain Costs of Issuance up to 75 bps
ELIGIBILITY
  • LIHTC new construction and properties undergoing substantial rehabilitation, including preservation and rural transactions
  • Lenders approved to deliver forward commitments under Fannie Mae’s Affordable Housing product line
INTEREST RATE
  • 9% LIHTC: Fixed Rate
  • 4% LIHTC: Fixed or Variable Rate
GOOD FAITH DEPOSIT 1% of the loan amount, due at issuance of the Forward Commitment, refundable upon conversion
FORWARD RATE LOCK 24 to 36- month commitments; one delegated six-month extension available
FORWARD STANDARD FEE
  • 9% LIHTC: 10 bps paid upfront prior to rate lock.
  • 4% LIHTC: 15 bps per year paid upfront prior to rate lock.
DELIVERY TOLERANCE
  • 9% LIHTC: +5% and -10% is available
  • 4% LIHTC: The original principal amount of the permanent Mortgage Loan must not be greater than 100% of the amount of the Unfunded Forward Commitment
CONVERSION TO PERMANENT LOAN The permanent loan will close upon project completion with certificates of occupancy for all units and 90% occupancy for 90 consecutive days; the permanent loan must meet Fannie Mae’s underwriting requirements
ADDITIONAL CONSIDERATIONS
  • 9% LIHTC: Second lien Delivery Assurance Note and Mortgage are necessary if required by Fannie Mae or the Bond Investor
  • 4% LIHTC: During the construction phase, the M.TEB execution requires the bonds to be cash collateralized with proceeds of a side-by-side construction loan and bond loan. The MBS will be delivered as bond collateral after conversion, following the M.TEB delivery guidelines.
TERM 10 to 30 years
AMORTIZATION Up to 35 years
MAXIMUM LTV
  • 9% LIHTC: 90%
  • 4% LIHTC: 90% for deals with 90% or more affordable units. 85% for less than 90% affordable units. 80% for refundings.
MINIMUM DSCR
  • 9% LIHTC: 1.15x
  • 4% LIHTC: 1.15x for deals with 90% or more affordable units. 1.20x for all other deals.

V020623

ARBOR.COM | 800.ARBOR.10
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