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Research

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.

Around the Web

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®

Student Housing

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.

Loan Amount Generally, $5 million to $100 million (larger and smaller loans will be considered)
Amortization 5 to 10 years. Up to 30 years for fixed-rate loans if loan is not purchased for securitization. Interest-only options available.
Minimum DSCR 1.30/1.35 if cash-out. Refer to: freddiemac.com/multifamily/product/pdf/student_housing.pdf for grid.
Maximum LTV 80%. Refer to: freddiemac.com/multifamily/product/pdf/student_housing.pdf for grid.
Rate Structure Fixed and floating rate options available.
Eligible Properties Specifically cater to a student tenant base. Not readily convertible to conventional multifamily housing. Must be greater than 50% student occupied. 12-month leases and parental guarantees are preferred. Food services not permitted. Must have minimum of 1 bathroom for every 2 bedrooms, and each apartment must have a separate full kitchen. Property must be located less than 2 miles from campus or on bus route.
Occupancy Requirement 90% physical occupancy for a minimum of 90 consecutive days prior to loan closing and as of the delivery date.
Tax & Insurance Escrows Monthly deposits required. May be waived if certain criteria are met.
Replacement Reserves Underwritten at a minimum of $150 per bedroom or $300 per unit per annum. Must be funded.
Recourse Non-recourse with standard exceptions, including for fraud and misrepresentation.
Commercial Space No more than 40% of effective gross income and no more than 40% of property’s total square footage.
Student Population Requirement Minimum 8,000 students.
Required Reports Appraisal, Property Condition Assessment and Phase I Environmental, Zoning, Insect and Flood.
Prepayment Defeasance for fixed-rate loans. Four main prepayment options available for floating-rate loans. No premium for final 90 days.
Assumable Subject to approval and 1% fee.
Subordinate Financing Not allowed.
Supplemental Loans Available Subject to requirements in the Loan Agreement and Freddie Mac.
Pricing Tiered Pricing Matrix. More favorable terms available for higher DSC and lower LTV.
Rate Lock Early rate-lock and Index Lock options available.
Application Deposit $26,500. Covers all estimated underwriting costs (including application fee).
Legal/Closing Fee Arbor’s Counsel Fee to be determined at application.
Good Faith Deposit 2% of loan amount due at rate lock for early rate-lock transactions refundable post-closing.

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