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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.

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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…


FHA® 223(a)(7):


Arbor provides streamlined refinancing of existing FHA-insured loans nationwide. Refinance costs, including 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. The 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 and 241 and 242.
Eligible Borrower Single Asset Entity (for profit or non-profit).
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 Non-recourse.
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 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 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 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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