Articles

Top Markets for Rental Demand Growth

Population growth, a critical factor in assessing rental housing demand, increased 0.9% in the U.S. during 2024, the fastest annual rate since 2008. However, growth rates were much higher for many markets, especially those in Texas, Florida, and the Carolinas. As first explored in Arbor’s Top Markets for Multifamily Investment Report Spring 2025, we dive deeper into metro-level population growth in markets with at least 500,000 residents to find the nation’s top markets for rental housing demand growth.

Articles

Arbor Recognized for Excellence from Agency Partners

Arbor’s platform of diverse multifamily financing solutions, combined with our strong industry relationships and our commitment to accuracy and close collaboration with our government-sponsored enterprise (GSE) partners, drives us to the top of the multifamily lender rankings year after year. Through decades-long relationships with Fannie Mae, Freddie Mac, and FHA, our best-in-class team delivered results for our borrowers in 2024, propelling Arbor to the top of the partner rankings.

Articles

Renters See Apartments as ‘Forever Homes’

Today’s renters are in it for the long haul. The Federal Reserve Bank of New York’s recently released 2025 SCE Housing Survey shows that the average renter thinks there is a two-in-three chance they will rent for the foreseeable future. With home prices and interest rates unfavorable to would-be homebuyers, we explore renters’ perceptions and how they could impact future rental housing demand.

Current Reports

Top Markets for Multifamily Investment Report Spring 2025

Arbor’s Top Markets for Multifamily Investment Report Spring 2025, developed in partnership with Chandan Economics, is your roadmap to the best locations to deploy capital. Based on the findings of our exclusive Multifamily Opportunity Matrix, this in-depth analysis assesses economic strength and market capabilities to navigate evolving conditions of the top 50 largest U.S. metros.

Research

Arbor’s data-driven articles and research reports empower multifamily and single-family rental investors and developers to make more profitable financial decisions.

Articles

Renters Account for Majority of Household Growth

The number of rental households climbed nearly 2% last year, as 848,000 more households became renters, an analysis of the U.S. Census Bureau’s Housing Vacancies and Homeownership Survey shows (Chart 1). Rental households also hit a new high of 45.3 million, accounting for more than half of all U.S. household growth in 2024. Weakening affordability, evolving lifestyle preferences, and a limited supply of quality housing all contributed to surging multifamily and single-family rental (SFR) demand.

Articles

Solar Panel Usage Accelerates in Rental Properties

Solar panel installations, which skyrocketed in the U.S. over the last half-century, are projected to double to 10 million in just six years. While installations soared in all types of residences, owner-occupied properties significantly outpaced rentals. However, the evolving economics of solar power may be approaching a tipping point for single-family rental (SFR) operators looking for a differentiator.

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Home | Freddie Mac | Student Housing Value-Add Loan
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FREDDIE MAC®

Student Housing Value-Add Loan

Arbor’s Student Housing product provides attractive terms and competitive prices for the purchase or refinance of properties that, because of construction and location, specifically cater to a student tenant base and may or may not be readily convertible to conventional multifamily housing.

  • Offers short-term, negotiable financing for upgrades of $10,000 to $25,000 per unit
  • Allows for a wide variation in borrower term and structure needs
  • Up to 50% of funds may be spent on unit interiors
  • Up to 75% of funds can be spent on exteriors
  • Budget can be adjusted up to 20% without additional approval
  • Interest-only and uncapped floating-rate loan
  • Eligible mixed-use properties are supported

Eligible Borrowers
  • Experienced borrowers who have successfully demonstrated expertise with comparable student deals.
  • 1.5x the standard minimum net worth and liquidity requirements for guarantors
Eligible Property Types
  • Properties with no more than 250 total units or 625 beds
  • Well-constructed properties requiring modest repairs
  • Market laggards that require capital infusion and new/improved management
  • Real-estate owned properties in receivership that are capable of improved performance
School Size 15,000 student enrollment minimum; this standard is greater than the student housing policy minimum of 8,000; properties must be within 2 miles of campus and have convenient access to campus by either public transit, shuttle or pedestrian access
Terms
  • Three years with one 12-month extension based on the borrower’s request and one optional 12-month extension based on Freddie Mac’s discretion
  • Floating-rate loan with full-term interest-only; no cap required
  • No lock out; borrower may pay off the loan at any time but must remit an exit fee of 1%; the exit fee will be waived if the loan is refinanced with Freddie Mac
  • Acquisitions and refinances; not assumable
  • Loan documentation at origination will include the Value-Add Rider, which will detail the terms/requirements of the rehabilitation
  • Required Escrows will include taxes, insurance, replacement reserves and Priority Repairs. A three-month debt service escrow is required for all transactions during the renovation phase. Upon completion of 40% of the renovation work and subject to DSCR requirement, 50% of the escrow may be released. Upon completion of 80% of the renovation work and subject to DSCR requirement, the remaining amount of escrow may be released. In addition to the completion requirements, the DSCR must be 1.25x or higher to qualify for release of escrow
  • For longer term ownership, cash-out is available provided a completion guaranty on budgeted improvements in an amount at least equal to the cash-out in place
Amount
  • Maximum loan-to-purchase/loan-to-value (LTV) ratio: 85%
  • Minimum amortizing debt service coverage ratio (DSCR): 1.20x
  • Sizing based on a 7-year sizing note rate
  • Appraisal must include as-is and as-stabilized values; underwriting must support a 1.35x DSCR and 75% LTV based on as-stabilized value supported by the appraisal
  • Standard Freddie Mac underwriting based on as-is income and expense
  • Refinance Test not required
  • No pro-forma underwriting of future performance
Rehabilitation
  • Rehabilitation must commence within 90 days of loan origination and be completed within 33 months
  • A scope of work is required; budget may range from $10,000-$25,000 per unit or $4,000-$10,000 per bed; the budget must allocate at least 25% to interior improvements
  • Budget can be adjusted by as much as 20% without additional approval; up to 50% of the budget may be spent on unit interiors
  • Completion Guaranty or rehabilitation escrow required; subject to Freddie Mac discretion
  • Borrower/Servicer reporting required.
At Loan Maturity/Refinance
  • Final engineer review of work completion and quality is required.
  • Refinance with Freddie Mac with no exit fee; otherwise 1% applies.
  • Freddie Mac will re-underwrite the loan to then current property performance.
  • One-year borrower extension option is available for a 0.5% extension fee, assuming no event of default
  • Additional Freddie Mac extension option is available, at Freddie Mac’s discretion, thereafter with a 1% extension fee
Fees Standard fees apply, including application fee and good faith deposit

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