Articles

Aging Baby Boomers Reshape the Housing Market

While the 2008 financial crisis prompted a cyclical shift in U.S. housing — impacting everything from home prices to who can qualify for a mortgage — an equally impactful demographic change was just taking shape. The unprecedented wave of Baby Boomers that began retiring would disrupt the balance of the housing market.

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® 232:

HEALTHCARE NEW CONSTRUCTION AND SUBSTANTIAL REHAB

Arbor provides FHA-insured, long-term, fixed-rate financing for new construction or substantial rehabilitation of assisted living, congregate care and nursing home facilities nationwide. Arbor uses the LEAN program to expedite underwriting and approval. Applications may be processed either as single-stage (firm application), or two-stage (preliminary application, followed by firm application).

Loan Term & Amortization Construction loan period (interest-only), followed by 40-year permanent (fully amortizing)
Maximum Loan to Value-
New Construction
& Substantial Rehab
Determined by the lowest of:

  1. 90% of HUD replacement cost
  2. Maximum LTV
    • SNF/ILU: 80% (for profit), 85% (nonprofit)
    • New construction ALF/MC: 75% (for profit), 80% (nonprofit)
    • Sub rehab ALF/MC: 80% (for profit), 85% (nonprofit)
  3. DSCR: 1.45x
Fixed Rate Yes – construction and permanent
Eligible Properties New construction or substantial rehabilitation of assisted living; memory care; and intermediate, skilled nursing facilities, or combination thereof

  • Maximum processing occupancy of 95%
  • Commercial space cannot exceed 10% of gross floor area or 15% of gross income
  • Independent living units cannot exceed 25% of total units in the project (up to 30% if waiver is granted)
Ineligible Properties Life-care-fee CCRC; LTAC (long-term acute care), adult day or currently in bankruptcy
Eligible Borrower Single asset entity (for profit or nonprofit)
Ineligible Borrower Owner, operator or any affiliates currently in bankruptcy, or filed/emerged from bankruptcy within prior five years
Experience Owners, operators/management agents must demonstrate a successful track record commensurate with developing or rehabbing properties of similar type, size and complexity; an owner-operator must have at least three years’ ownership and operating experience; SNF administrators must also have three years of experience
Tax & Insurance Escrows Monthly deposits required
Recourse Nonrecourse, subject to HUD Regulatory Agreement
Commercial Space Maximum 10% of gross floor area and maximum 15% of gross potential income; 20% vacancy rate applied (daycare space is not considered commercial)
Required Reports Market Study, Appraisal, Architect Review of Construction Costs and Drawings and Phase I Environmental
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
Expense Escrow Yes – sufficient to cover Arbor’s expenses and third-party report costs
Origination Fee Negotiable
HUD Application Fee 0.15% due to HUD at pre-application, 0.15% at firm application; if borrower chooses nonrefundable straight-to-firm HUD application, fee is the full 0.3%
HUD Inspection Fee $5 per $1,000 (0.5%) of the mortgage amount for new construction and $5 per $1,000 (0.5%) of improvement costs for substantial rehabilitation
Legal/Closing Fee Borrower pays Arbor’s counsel fee and miscellaneous closing costs
Rehabilitation Qualifications > 15% of the “as rehabbed” appraised value, or replacement of at least two major building systems
Davis Bacon Davis Bacon labor standards and wage requirements apply to construction and rehab work
Licensing Borrower must provide to HUD evidence/documentation from the appropriate local/state tax licensing authorities showing approval for the operation of the project (or applicable portions thereof) prior to occupancy of the project (or applicable portion thereof)
HUD Mortgage Insurance Premium (MIP) 0.77% market rate; 0.45% affordable; 1% MIP upfront at closing

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