Articles

How Multifamily Property Renovations Add Value and Marketability

The ideal time to renovate is when the rental market is strong. With high occupancy rates, borrowers are more likely to quickly realize returns on their multifamily property renovations through higher rents. However, renovating during a market downturn, when rents are often cheaper, inventory is higher, and materials are more affordable, is also a sound strategy.

Current Reports

Single-Family Rental Investment Trends Report Q2 2024

Quarter after quarter, the single-family rental (SFR) sector reaches new heights. From new construction to cap rates, Arbor’s Single-Family Rental Investment Trends Report Q2 2024, developed in partnership with Chandan Economics, details how the sector’s healthy fundamentals create profound optimism in its long-term prospects.

Articles

Arbor Sponsors Smile Farms Golf Outing Supporting Local Employment Opportunities

Arbor, which takes pride in helping employees reach their full potential, was honored to sponsor and participate in Smile Farms’ 10th Anniversary Golf Outing on May 20 at the Plandome Country Club on Long Island, NY, benefiting the Long Island-based organization dedicated to advancing opportunities for people with disabilities.

Articles

New York State’s 2025 Budget Advances Affordable Housing Goals

In April, New York State Governor Kathy Hochul announced a landmark budget agreement heralded as a giant step for affordable housing. New York’s FY 2025 Enacted Budget includes several key policy changes that could create thousands of affordable housing units across the state.

Articles

SFR East 2024: How Economics and Demographics Shape the Rental Market

IMN’s Single Family Rental Forum (East), the cornerstone gathering of the SFR industry, concluded on May 22, 2024, in Miami, FL. Over three days, 1,800 attendees listened to more than 280 speakers discuss all angles of the SFR industry. On the first day of the conference, Arbor’s Tres Seippel, Director, Construction Management, participated in a wide-ranging panel discussion examining economic and demographic forces influencing SFR and build-to-rent (BTR), which also featured Rick Dalton, President of the Dalton Group, Domonic Purviance of the Federal Reserve Bank of Atlanta, Wade McGuinn, CEO of McGuinn Hybrid Homes, and Heather Williams, VP at Willow Bridge Property Company.

Articles

Affordable Housing Market Snapshot — May 2024

As housing costs spiral, rental affordability has become a more urgent issue, burdening a greater number of Americans. With more funding on the way, policymakers and private market advocates are pressing ahead with plans to add units to an increasingly tight housing market.

General: 800.ARBOR.10

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.

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