Press Releases

Arbor’s Servicer Ratings Affirmed and Positive Outlook Rating Assigned by Fitch

Fitch Ratings Recognizes Arbor’s Commitment to Excellence and Innovation Arbor Realty Trust (NYSE:ABR) NEW YORK, NEW YORK – November 29, 2023: Fitch Ratings has reaffirmed Arbor Multifamily Lending, LLC’s (Arbor) commercial primary and special servicer ratings, further solidifying Arbor’s position as a trusted partner in the multifamily lending industry. Concurrently, they have assigned a Positive Outlook to each rating, reflecting an unwavering commitment to excellence and innovation. Commercial primary servicer rating at ‘CPS2’; Outlook Positive; Commercial special servicer rating at ‘CSS3+’; Outlook Positive. “The assignment of the Positive Outlook reflects Fitch’s 12–24 month view on the trajectory of Arbor’s primary servicer rating, noting that as the new borrower website is fully realized and deployed and turnover within the primary servicing function continues to stabilize, positive rating movement is possible.” – Fitch Ratings Read more from Fitch about the key rating drivers behind this announcement. Direct inquiries to [email protected]. About Arbor Arbor Realty Trust, Inc. (NYSE: ABR) is a nationwide real estate investment trust and direct lender, providing loan origination and servicing for multifamily, single-family rental (SFR) portfolios, and other diverse commercial Read the full article…

Articles

Video: Special Report Fall 2023 Key Takeaways

In this video, Dr. Sam Chandan, Founding Director of the C.H. Chen Institute for Global Real Estate Finance at the NYU Stern School of Business and non-executive chairman of Chandan Economics, details the key takeaways of Arbor’s Special Report Fall 2023, which he co-authored with Ivan Kaufman, Chairman and CEO of Arbor Realty Trust.

Articles

FHFA Loan Caps for 2024: What Multifamily Borrowers Need to Know

The Federal Housing Finance Agency (FHFA) announced a $10 billion rollback of Fannie Mae and Freddie Mac’s volume cap for loan purchases for 2023 to $140 billion ($70 billion for each agency). This move aligns with industry expectations, given the anticipation of continued headwinds for the multifamily in 2024. Next year’s cap for the Government-Sponsored Entities (GSEs) is a reduction of approximately 7% from the $150 billion limit set for 2023 and a return to the level it was in 2021.

Current Reports

Affordable Housing Trends Report Fall 2023

With the cost of living climbing, the need for affordable housing has become more urgent. Although demand continues to outpace available supply, multifamily investment in affordable housing is fortified by Low-Income Housing Tax Credits (LIHTC), Project-Based Section 8, and the Housing Choice Voucher (HCV) programs. Arbor’s Affordable Housing Trends Report Fall 2023, developed in partnership with Chandan Economics, examines the supply-driven programs and policies designed to improve supply at a point in time when federal gridlock has stalled many funding increases.

Current Reports

Small Multifamily Investment Trends Report Q4 2023

Arbor’s Small Multifamily Investment Trends Report Q4 2023, developed in partnership with Chandan Economics, is a snapshot of a strong and resilient subsector continuing to navigate ongoing market dislocation. The report shows that distress has remained limited, even with valuations and measures of risk pricing in flux. As conditions start to stabilize, there are signs that deal activity is picking up.

GENERAL: 800.ARBOR.10

FRDDIE MAC®

Moderate Rehab Loan

Arbor provides the capital you need to renovate your property at the lowest cost possible. During renovation, the loan can be an interest-only floating-rate debt, and loan proceeds are advanced monthly as requested rather than accruing interest on unused funds. The terms are highly negotiable, allowing for variation in borrower terms and structure needs. These loans offer a flexible liquidity source for experienced and well-capitalized sponsors who have successfully completed rehabilitation projects of similar scope and who are familiar with the loan process.

Loan Terms
  • Deal specific/negotiated
  • Interest-only during the Interim Phase
  • Hedge: Uncapped during the Interim Phase; cap required if converted to a floating rate Permanent Phase
Eligible Borrowers Experienced and well-capitalized sponsorswho have successfully completed rehabilitation projects of similar scope and who are familiar with the Freddie Mac loan process.
Eligible Properties Types
  • $25,000-$60,000 in renovations per unit with a minimum of $7,500 per unit designated for interior work
  • Minimum occupancy: Rehabilitation plan may not take debt service coverage ratio (DSCR) below 1.0x on an interest-only basis
  • Not eligible – seniors housing, student housing, MHC, preferred equity with hard pay, and mezzanine financing
Amount Loan-to-value (LTV) ratio:

  • Fund up to 80% of the as-is value, supported by the property acquisition price, if applicable
  • Periodic draws of unfunded loan proceeds (as opposed to an escrow) to reimburse the sponsor for up to 80% of the renovation costs on a monthly or quarterly basis as work is completed, similar to construction financing
  • Appraisal must demonstrate 80% as improved LTV (with fully funded renovation proceeds)

 
Debt service coverage ratio (DSCR):

  • Initial sizing – 1.20x interest only “as is”
  • An improved underwritten net operating income (NOI) per appraisal must reflect no less than 1.30x amortizing debt service coverage ratio (DSCR) and will be subject to appraisal support
Rehabilitation
  • Additional documents: Freddie Mac Disbursement Agreement, Disbursement Servicing Agreement, Operating Deficit Agreement & Completion Guaranty for 80% of approved budget and all work initiated, construction scope, budget and schedule
  • Pre-Construction Analysis Report: Must provide opinion to whether construction plan can reasonably be completed within the budget and schedule
  • Draws: Released upon request, but no more than once a month; first draw will be based on a certificate from the Servicer to Freddie Mac confirming that the request complies with the requirements set forth in the Disbursement Agreement (including but not limited to inspections, lien waivers and standard documentation); subsequent draws will require additional certifications as well as Freddie Mac’s independent confirmation of the information/documents supporting the prior certification. 5% retainage of draws are held and released once satisfactory confirmation of completion of all budgeted work has been received.
  • Monitoring: In addition to the draw certificates noted above, monitoring to reflect quarterly progress reports and inspections including rent rolls and operating statements.
  • Timing: All units must be habitable by 6 months prior to conversion to the Permanent Phase, and all renovation work is expected to be completed by 3 months prior to conversion to the Permanent Phase.
Structure
  • Loan type: Float-to-Float or Float-to-Fixed.
  • Conversion: FInterim Phase is floating, followed by either floating or fixed Permanent Phase; note rate to be determined at loan origination.
Prepayment
  • Float-to-Float: 2% prepayment premium during Interim Phase; standard Freddie Mac prepay structures available thereafter.
  • Float-to-Fixed: Yield Maintenance during Interim Phase; standard Freddie Mac prepay structures available thereafter.
Fees Standard fees apply, including application fee based on fully funded loan amount and good faith deposit.

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