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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(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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