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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 Resident Owned Community Loan (MHROC)

  • Designed specifically for MHROCs (also known as MH Cooperatives).
  • Expands affordable housing options for underserved populations, particularly in rural and non-metro areas where
    MHROCs are prevalent.

Eligible Property Types Existing, stabilized, high-quality, professionally managed MHROCs, with or without age restrictions.
Eligible Transaction Types
  • Acquisition/Conversion: An Acquisition Mortgage on a Manufactured Housing
    Community which is in the process of converting from a rental property to an
    MHROC. The MHROC Borrower must be formed prior to rate lock.
  • Seasoned Refinance: A Refinance Mortgage on an existing MHROC with most
    shares already sold to resident shareholders.
Eligible Borrowers Not-for-profit cooperative corporation or association (“Co-op”) in which shares in
the Co-op are sold to shareholders and such shares entitle the shareholder to
occupy a specific pad.
Requirements for Resident Shareholders At rate lock:

  • 100% of pads must be owned by the MHROC Borrower.
  • Resident-shareholders must own more than 90% of shares.

Seasoned Refinances offer flexibility on this point with alternate sizing.

Debt Service Reserve May be required.
Terms 5- to 30-year terms.
Minimum UPB Amount $500,000.
Maximum Amortization 30 years.
Interest Rate Fixed rate only, floating rate not permitted. Additional information upon request.
Interest Only Amortizing only – Interest only not permitted.
Prepayment Provisions Defeasance for fixed rate loans. No prepayment premium for final 90 days of
term. Additional prepayment options are available.
Recourse Requirements Non-recourse, guarantor not required.
Supplemental Financing Available, subject to the Supplemental Loan offering and Loan Agreement requirements.
Home Rentals The percentage of homes owned by the borrower, borrower-affiliate, or third-party investor cannot exceed 5% in aggregate.
Tax and Insurance Escrows Required.
Replacement Reserve Escrows Minimum $50/site/year and $250/borrower-owned manufactured home/year (if included in the collateral).
Application Fee Greater of $2,000 or 0.1% of loan amount.
Early Rate and Spread Lock Options Standard Delivery.

Refinance Test Refinance Test is necessary on all MHROC loans.
Additional Considerations
  • Private facilities (e.g., wells and septic systems) are allowed with considerations.
  • Rental leases cannot contain option to purchase pad sites or borrower-owned manufactured homes.
  • Retail sales or financing by borrowing entity of any manufactured homes or shares in the MHROC Borrower is not allowed.
  • RV campgrounds are broken condominiums are excluded.
  • Wrap financing, seller financing, mezzanine financing, and preferred equity are not permitted.
  • Freddie Mac will not purchase end loans or loans to individual shareholders.

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