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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…

GENERAL: 800.ARBOR.10

FREDDIE MAC®

Manufactured Housing Community Loan

With flexible financing, competitive pricing, certainty and speed of execution, a manufactured housing community (MHC) loan provides financing for affordable housing for underserved populations, particularly in rural and non-metro areas across the country, where MHCs are an important, and sometimes only, source of affordable housing.

Minumum Loan Amount $1M
Eligible Property Types Existing, stabilized, high-quality and professionally managed MHCs, with or without age restrictions, excluding Seniors Housing Loans
Eligible Borrowers
  • Key principal should have two or more years of experience in operating MHCs and own one other MHC property
  • Borrower may be a limited partnership, corporation, limited liability company or a tenancy in common (TIC) with 10 or fewer tenants in common
  • General partnerships, limited liability partnerships, REITs and certain trusts may also be acceptable in limited circumstances, subject to additional requirements
  • Borrower must be a Single Purpose Entity (SPE)
  • On loans less than $5 million, a borrower other than a TIC may be an SPE instead
  • If the borrower is a TIC, each TIC must be an SPE
Terms 5-, 7-, and 10-year terms; longer term loans considered on a case-by-case basis
Maximum Amortization 30 years
Interest Rate Fixed- or floating-rate options available
Interest Only Partial-term and full-term interest-only available
Prepayment Provisions Refer to the Fixed-Rate Loan and Floating-Rate Loan Term Sheets for additional information
Recourse Requirements Non-recourse except for standard carve-out provisions
Supplemental Financing Available, subject to the Supplemental Loan offering requirements
Tax and Insurance Escrows Required
Replacement Reserve Escrows Minimum $50 per site per year
Application Fee Greater of $2,000 or 0.1% of loan amount
Early Rate and Spread Lock Options Early rate lock and spread lock options available, typically ranging from 60 days to 120 days, including Early Rate Lock and Index Lock options
Refinance Test No Refinance Test is necessary if the loan has an amortizing debt coverage ratio (DCR) of 1.40x or greater and a loan-to-value (LTV) ratio of 60% or less
Additional Considerations
  • The property must have a minimum of five paid sites
  • The percentage of homes owned by the borrower, borrower-affiliate, or third-party investor cannot exceed 25% in aggregate
  • Homes must conform to the requirements of the Federal Manufactured Home Construction and Safety Standards Act of 1974 (HUD Code Standards)
  • Private wells and septic systems are allowed with considerations
  • Leases cannot contain options to purchase pad site
  • Retail sales or financing by borrowing entity of any manufactured home are not allowed
  • RV campgrounds and broken condominiums are excluded
MHC Tenant Protections Within 12 months after loan origination, the following MHC Tenant Protections must be included in all MH homeowner leases, community rules and regulations, or other written agreements:

  • One-year renewable lease term, unless there is a good cause for non-renewal
  • 30-day written notice of rent increases
  • Five-day grace period for rent payments and the right to cure defaults on rent payments
  • Right to sell the manufactured home to a buyer that qualifies as a new tenant in the community, without having to first re-locate it out of the community
  • Right to sell the manufactured home in place within 30 days after eviction by the community owner
  • Right to sublease or assign the pad site lease for the unexpired term to the new buyer of the tenant’s manufactured home without any reasonable restraint, so long as the new buyer qualifies as a new tenant within the community
  • Right to post “For Sale” signs that comply with community rules and regulations
  • Right to receive at least 60 days’ notice of planned sale or closure of the community

Note: Any MHC Tenant Protection that violates applicable laws will automatically void and will not affect the enforceability of any other provisions of the agreement

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