FHA® 223(f):
REFINANCE, ACQUISITION, OR MODERATE RENOVATION
Arbor provides FHA-insured, long-term, fixed-rate financing for refinance, acquisition or moderate renovation of multifamily projects nationwide. Arbor uses the single-stage Multifamily Accelerated Processing (MAP) Program to expedite underwriting and approval.
See the Terms
| Loan Term & Amortization | Up to 35 years, not to exceed 75% of the remaining economic life (Fully Amortizing). |
| Minimum DSCR | 1.176x for Market Rate properties, or LIHTC restricted whose rents are < 10% below market; 1.15x for LIHTC restricted properties with rents at least 10% below market; 1.11x for properties having at least 90% rental assistance contracts. |
| Maximum Loan to Value/Acquisition Cost | 85% for Market Rate properties, or LIHTC restricted whose rents are < 10% below market; 87% for LIHTC restricted properties with rents at least 10% below market; 90% for projects with 90% or greater Rental Assistance. |
| Fixed Rate | Yes |
| Eligible Properties | Existing Multifamily projects at least three years old. Detached structures and row houses eligible. Market rate, low-to-moderate income and subsidized multifamily properties. |
| Eligible Borrower | Single Asset Entity (for profit or non-profit). |
| Occupancy Requirement | Average 85% occupancy for the 6 months prior to HUD application submission. Maximum economic underwriting occupancy of:
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| Cash Out | Cash out allowed when 80% of value exceeds existing debt plus transaction costs, but only 50% of the net cash will be released at closing. The remaining 50% will be held in escrow until all required repairs are completed. A potential waiver is available to reduce holdback to 25%. |
| Tax & Insurance Escrows | Monthly deposits required. |
| Recourse | Non-recourse, subject to HUD Regulatory Agreement. |
| Commercial Space | Maximum 25% of net rentable area and maximum 20% of effective gross income; minimum 10% underwritten vacancy. |
| Required Reports | Borrower is responsible for all required report costs, included but not limited to: Appraisal, Market Study, Environmental Phase I, Phase II (if applicable), and PCNA. Pre-1978 properties may require lead-based paint and asbestos- containing material testing. Projects 30 years of age or older may require additional testing. Costs can be reimbursed from loan proceeds at closing. |
| Prepayment | Typically 10% year 1, declining 1% per year. Other pre-payment options available subject to market conditions. |
| Assumable | Subject to Arbor and HUD approval and payment of assumption fee. |
| Good Faith Deposit | Negotiable based on project type and loan size. |
| Expense Escrow | Yes – sufficient to cover Arbor’s expenses and third-party report costs. |
| Origination Fee | Negotiable |
| HUD Application Fee | Non-refundable fee of $3 per $1,000 (0.3%) of the mortgage amount due to HUD upon application submission. |
| HUD Inspection Fee | $30 per unit when repairs are less than $3,000 per unit. If above $3,000 per unit, 1% of the total cost of the repairs. |
| Legal/Closing Fee | Borrower pays Arbor’s Counsel Fee and miscellaneous closing costs. |
| Rehabilitation Qualifications | Repairs cannot exceed $15,000 per unit (adjusted for local high-cost factor). Repairs/replacements are also limited to one major building component. |
| Davis Bacon | Not applicable to this program. |
| HUD Mortgage Insurance Premium | HUD sets the cost of the FHA Insurance. The initial MIP is 1% of the loan amount due to HUD at closing. Annual MIP rates:
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