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Research

How Big is Small Cap Multifamily?

A closer look at the multifamily housing inventory in the United States and the size of the small cap investment opportunity.

Around the Web

Multifamily Forecast: Investors Moving to Secondary Markets

The apartment sector has remained the darling of the commercial real estate for the past six years. This doesn’t appear to be changing anytime soon, as 2016 is expected to set a new record for multifamily mortgage origination volume. While multifamily’s position as top dog remains uncontested, savvy investors are altering their strategy for sourcing Read the full article…

GENERAL: 800.ARBOR.10

FANNIE MAE DUS®

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.
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 or 30 month commitments. One delegated six-month extension available.
Forward Standby Fee
  • 9% LIHTC: 10 bps paid upfront prior to rate lock and 5 bps for the 6 month extension.
  • 4% LIHTC: 15 bps per year paid upfront prior to rate lock and 7.5 bps for the 6 month extension.
Delivery Tolerance +5% and -10% is available.
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 Up 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 all other deals.
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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