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Understanding the Impact of Wildfires on Rental Property Insurance

From California to Maui, the frequency and scope of wildfire events are rising, causing insurance markets and public agencies to reevaluate property in areas at risk for catastrophic damage. As a result, rental housing providers are seeing greater limitations to coverage, higher premium prices, and, in some cases, a total absence of viable private insurance — a trend detailed in the NMHC 2023 State of Multifamily Risk Survey and Report. This troubling new trend has placed many rental housing operators in a bind where they must simultaneously contend with the declining availability and affordability of insurance options.

Articles

Five Advantages of FHA Multifamily Construction Loans

In the last three years, multifamily construction has reached levels not seen since the 1980s, supported, in part, by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) loans. If you are exploring the acquisition, refinancing, rehabilitation, or new construction of conventional multifamily, affordable housing, seniors housing, or a healthcare facility, consider FHA multifamily construction loans, a stable financing option with excellent terms and many other attractive advantages.

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Where are Single-Family Rental (SFR) Rents Rising the Fastest?

While the single-family rental (SFR) sector’s rent growth averages have retreated from record highs, structural tailwinds are keeping price growth positive — both nationally and in major SFR markets. In this research brief, Chandan Economics and Arbor Realty Trust analyze DBRS Morningstar data, which covers the top 20 MSAs by SFR activity, to discover the metropolitan areas where SFR rent growth is the hottest right now.

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Fannie Mae Small Loans Cap Raised to $9 Million

Fannie Mae recently announced that its Small Loan cap has increased from $6 million to $9 million for all loans committed as of August 22, 2023. Multifamily borrowers and lenders have praised the change to the Fannie Mae Small Loans program, which will encourage greater investment in a rapidly growing sector where demand remains high despite market volatility.

Articles

The Top Five Emerging Metros for Retiree Relocation

As Baby Boomers reach retirement age, their evolving geographic preferences are strengthening housing markets and local economies in new locations, which feature attractive climates, relative affordability, and ample outdoor activities. With swelling populations of senior citizens, our top five emerging metropolitan areas for retiree relocation are fertile ground for multifamily real estate investment.

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GENERAL: 800.ARBOR.10

FHA® 223(a)(7):

REFINANCE OF EXISTING HUD-INSURED LOAN

Arbor provides streamlined refinancing of existing FHA-insured loans nationwide. Refinance costs, such as prepayment, are included.

Loan Term & Amortization Remaining term of the existing HUD loan plus up to 12 years (subject to HUD approval); term cannot exceed the original term of the existing loan; loan is fully self-amortizing
Loan Amount No cash-out; new loan amount is the lowest of:

  1. Original principal balance of existing loan
  2. 100% of the costs to refinance (current principal balance plus transaction costs, repairs and deposits to replacement reserves)
  3. Minimum debt service coverage of 1.11 (1.05 for Section 8 contracts on at least 90% of units)
Interest Rate Fixed rate subject to market conditions at time of rate lock
Eligible Properties Multifamily projects or healthcare facilities currently insured under Sections 220, 221(d), 223(f), 232, 241 and 242
Eligible Borrower Single asset entity (for profit or nonprofit)
Cash Out Not allowed
Tax & Insurance Escrows Monthly deposits to the escrows are required for property insurance, real estate taxes, reserves for replacement and mortgage insurance premiums
Recourse Nonrecourse, subject to HUD Regulatory Agreement
Required Reports New Property Condition Needs Assessment (PCNA) required if last report is over two years old
Prepayment Typically 10% year 1, declining 1% per year; other prepayment options available subject to market conditions
Assumable Subject to Arbor and HUD approval and payment of assumption fee
Good Faith Deposit Negotiable based on loan size
Expense Escrow Yes – sufficient to cover Arbor’s expenses and third-party report costs
Origination Fee Negotiable
HUD Application Fee 0.15% of the new loan amount paid to HUD with Firm Commitment Application
HUD Inspection Fee Not applicable
Legal/Closing Fee Borrower pays Arbor’s counsel fee and miscellaneous closing costs
Repairs Repairs approved by HUD can be funded by mortgage proceeds with 10% completion assurance escrow; repairs are limited to $1,500 per unit
Davis Bacon Not applicable to this program
HUD Mortgage Insurance Premium (MIP) HUD sets the cost of the FHA Insurance

  • Market rate properties: 0.50% upfront, 0.50% annually
  • Affordable properties: 0.35% upfront, 0.35% annually
  • Broadly affordable or energy efficient properties: 0.25% upfront, 0.25% annually

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