Articles

Affordable Housing Market Snapshot — May 2024

As housing costs spiral, rental affordability has become a more urgent issue, burdening a greater number of Americans. With more funding on the way, policymakers and private market advocates are pressing ahead with plans to add units to an increasingly tight housing market.

Articles

The Probability Renters Will Keep Renting Hits Record High

The average renter thinks there is a three-in-five chance they will still be in the rental market in 2027, according to the New York Federal Reserve’s recently released 2024 SCE Housing Survey. Compared to last year, the probability of the average renter not becoming a homeowner in the next three years was up 4.3 percentage points, reaching its highest mark since the study began in 2015.

Current Reports

Small Multifamily Investment Trends Report Q2 2024

Small multifamily’s performance continues to conform to pre-pandemic norms typically seen before the historic boom years of 2021 and 2022. In the first quarter of 2024, cap rates and asset prices both improved quarter-over-quarter, Arbor’s Small Multifamily Investment Trends Report Q2 2024, developed in partnership with Chandan Economics, has found. The subsector’s fundamental strength will support steady growth amid tight credit conditions until interest rate relief invites increased investment activity.

Analysis

U.S. Multifamily Market Snapshot — May 2024

Key fundamentals of the U.S. multifamily remained strong to start 2024. Despite fears of oversupply, rent growth remained stable and vacancy rates remained near historical lows.

Articles

Arbor Marketing Campaign Wins Two Awards at Industry Gala

For more than 30 years, Arbor has been committed to building strong bonds with clients that lead to mutual success. This philosophy is at the heart of a unique Arbor marketing campaign, The Art of Growing Financial Partnerships, which received two awards at the 30th Annual Financial Communications Society (FCS) Portfolio Awards Gala in New York City on May 2. The campaign, which was featured in two private jet terminals, used original stained-glass pieces to build brand awareness among high-net-worth travelers.

Articles

Top SFR Annual Rent Growth Markets

Even as rents retreated elsewhere, single-family rentals (SFR) have continued to outperform all other housing sub-types, exceeding the all-property type national average in 17 consecutive months through February 2024, according to Zillow’s Observed Rent Index (ZORI). Annual SFR rent growth has seen substantial gains in many metropolitan areas since national rent growth peaked in March 2022. In this deep dive, the Chandan Economics and Arbor Realty Trust research teams pinpoint the metropolitan areas where SFR rents are rising the fastest.

General: 800.ARBOR.10

FHA® 223(f):

Refinance, Acquisition or Moderate

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)
  • 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 Non-recourse, 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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