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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

FHA®

223(f) Refinance of Section 202 Properties

Arbor provides FHA-insured, long-term, fixed-rate financing for refinance or moderate renovation of existing Section 202 projects nationwide. Arbor uses the single-stage Multifamily Accelerated Processing (MAP) program to expedite underwriting and approval.

Loan Term & Amortization Up to 35 years (Fully Amortizing).
Minimum DSCR 1.11x for non-profit.
Maximum Loan to Value/Purchase Price Up to 90%.
Fixed Rate Yes
Eligible Properties Existing Section 202 projects.
Eligible Borrower Single Asset Entity (for profit or non-profit).
Developer Fee Up to 15% of the acceptable development cost.
Tax & Insurance Escrows Monthly deposits required.
Recourse Non-recourse.
Commercial Space Maximum 25% of net rentable area and maximum 20% of effective gross income.
Required Reports Appraisal, Project Capital Needs Assessment (PCNA) & Phase I Environmental.
Prepayment Negotiable. Generally two-year lockout with a 10% to 1% declining pre-payment penalty. Other pre-payment options are available.
Assumable Subject to Arbor and HUD approval and payment of assumption fee.
Good Faith Deposit Negotiable based on project type.
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 with the firm commitment submission package.
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), 15% of appraised value. 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 due to HUD at closing, and the MIP is escrowed monthly thereafter.
Prepayment of Section 202 Loan HUD’s Housing Notice 2013-17 provides guidance for the prepayment approval process.

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