Articles

Aging Baby Boomers Reshape the Housing Market

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Articles

Secondary and Tertiary Markets Gain Ground on Primary Cities

As secondary and tertiary markets continue to gain parity with larger primary cities around the nation, they offer investors a significant potential for return on investment, even as the U.S. and global economic landscapes face notable headwinds.

Analysis

Small Multifamily Investment Snapshot — Q4 2022

The small multifamily sub-sector ended 2022 on a high note with originations falling just behind 2021’s peak. As economic storm clouds continue circling, small multifamily appears fortified from any reverberations that may result.

Press Releases

Arbor Realty Trust Reacts to Ningi Research Report

UNIONDALE, N.Y., March 14, 2023  (GLOBE NEWSWIRE) – Arbor Realty Trust (NYSE: ABR), announced today that the Company is in receipt of the purported “research” report that was published earlier today by Ningi Research, a short seller of Arbor stock. The report lacks merit and contains numerous inaccuracies, misstatements, and otherwise misleading allegations. This false Read the full article…

Articles

Arbor’s Leah Fisher Joins Global Sustainability Panel at InnovateESG

Arbor Senior Vice President, Special Projects, Governance and Risk, Leah Fisher recently spoke on a thought-provoking panel discussion at InnovateESG 2023, a conference focused on environmental, social, and governance missions, hosted by NYU Stern’s Chen Institute for Global Real Estate Finance.

Articles

Single-Family Rental Investment Snapshot — Q4 2022

SFR will maintain exposure to the cyclical disruption brought on by the housing market’s softness and rising interest rates, even though its structural growth outlook remains positive and unchanged.

GENERAL: 800.ARBOR.10

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.

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, or LIHTC restricted, properties 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 LTV 85% for market rate, or LIHTC restricted, properties 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; market rate, low-to-moderate income and subsidized multifamily properties
Eligible Borrower Single asset entity (for profit or nonprofit)
Occupancy Requirement Average 85% occupancy for the six months prior to HUD application submission; maximum economic underwriting occupancy of:

  • 93% for market rate properties (i.e., at least 20% market rate units, or LIHTC whose rents are < 10% below market rents)
  • 95% for LIHTC restrictions on at least 80% of units at rents at least 10% below market
  • 97% for properties having at least 90% rental assistance, or 90% LIHTC set aside with rents at least 10% below market
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; remaining 50% will be held in escrow until all required repairs are completed; potential waiver is available to reduce holdback to 25%
Tax & Insurance Escrows Monthly deposits required
Recourse Nonrecourse, 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 one, 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 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 Nonrefundable 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; initial MIP is 1% of the loan amount due to HUD at closing; annual MIP rates:

  • Market Rate Properties: 0.60%
  • Affordable Properties: 0.35%
  • Broadly Affordable or Energy Efficient Properties: 0.25%
  • “Green” energy efficiency achievement): 0.25%

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