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Welcome to Chatter! We’re happy to be your source for multifamily news, research and insight. Bookmark us and be sure to sign up for our weekly newsletter to stay on top of all things financing and investment for the multifamily industry. We also invite you to follow us on Twitter. What is Chatter? So what Read the full article…


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…



Affordable Single-Family Rental Pilot Program

Arbor’s Freddie Mac Single-Family Rental (“SFR”) Pilot Program provides Borrowers much needed access to credit with longterm financing at lower rates. The offering is for Borrowers who operate in the affordable segment of SFR.

Eligible Property Types/Markets Single-family detached homes and townhomes or row houses.
2- to 4-unit rental properties.
Each property must be fully constructed with permanent C/Os.
No manufactured homes, condos, or co-ops.
Eligible Borrowers Minimum 5 years of experience in managing and owning SFR homes.
Own a minimum of 50 SFR homes.
Single Purpose Entity.
Long-term operators who do not focus on rent-to-own operations or exclude
Section 8 tenants.
Affordability Requirements 75% of the SFR homes must have rents that are affordable at 80% or below of the applicable AMI; waivers will be considered for Borrowers with mission-based or nonprofit strategies. Additionally, for loans where only 51% or more of the SFR homes are affordable at 80% AMI or below, Freddie Mac will consider these loans but will need to submit a separate approval request to FHFA prior to issuing a hard quote.
Terms 5, 7 or 10 years.
Amortization 30 years.
Interest Rate Fixed.
Minimum Loan Size $5,000,000.
Minimum DCR 5-year term: 1.30x
7-year term: 1.30x
10-year term: 1.25x
Minimum LTV Ratio 5-year term: 70%
7-year term: 75%
10-year term: 75%
Loan to Cost (LTC) Up to 12 months from purchase, lesser of LTV requirement of 80% LTC, where the underlying cost (including rehabilitation costs) can be applied for up to 12 months.
Servicing Minimum of 25 bps based on loan size.
Insurance Requirements Commercial level standards consistent with other SFR lender requirements.
Prepayment Yield maintenance or step-down.
Property Management Required professional third-party management or Borrower affiliate with an
existing contract in place. Replacement manager must be approved by lender.
Escrows Required for taxes, insurance, replacement reserve and HOA (if applicable).
Application Fee Greater of $5,000 or 0.10% of the loan amount.

Geographic Location Each metropolitan statistical area (MSA) represented in a loan portfolio must
have at least five homes.
Recourse Non-recourse except for standard carveouts.
Valuation Requirements All of the properties must be valued in an acceptable manner. Recent appraisals (up to six months old) must account for at least 30% of all homes, with a minimum of 15 appraisals. Valuations for the remaining 70% of homes to be determined at Freddie Mac’s discretion.
Financial Reporting Quarterly rent roll and unaudited operating statement.
Cross Collateralization Required; no single property loan.
Pledge Collateral Pledge of 100% of Borrower ownership interests by Single Purpose Entity Pledgor.
Releases Standard release provisions with 115% payment and applicable prepayment premiums.


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