Government Shutdown: What Multifamily Borrowers Need to Know

Unless an 11th-hour agreement is reached, a Congressional impasse will trigger the first partial U.S. government shutdown in four years. Starting October 1, 2023, many non-essential federal government operations will be limited or suspended. Agency lending, however, will not be interrupted, and there is no cause for concern. Borrowers should anticipate some inconveniences, such as processing and closing delays.


Understanding the Impact of Wildfires on Rental Property Insurance

From California to Maui, the frequency and scope of wildfire events are rising, causing insurance markets and public agencies to reevaluate property in areas at risk for catastrophic damage. As a result, rental housing providers are seeing greater limitations to coverage, higher premium prices, and, in some cases, a total absence of viable private insurance — a trend detailed in the NMHC 2023 State of Multifamily Risk Survey and Report. This troubling new trend has placed many rental housing operators in a bind where they must simultaneously contend with the declining availability and affordability of insurance options.


Five Advantages of FHA Multifamily Construction Loans

In the last three years, multifamily construction has reached levels not seen since the 1980s, supported, in part, by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) loans. If you are exploring the acquisition, refinancing, rehabilitation, or new construction of conventional multifamily, affordable housing, seniors housing, or a healthcare facility, consider FHA multifamily construction loans, a stable financing option with excellent terms and many other attractive advantages.


Where are Single-Family Rental (SFR) Rents Rising the Fastest?

While the single-family rental (SFR) sector’s rent growth averages have retreated from record highs, structural tailwinds are keeping price growth positive — both nationally and in major SFR markets. In this research brief, Chandan Economics and Arbor Realty Trust analyze DBRS Morningstar data, which covers the top 20 MSAs by SFR activity, to discover the metropolitan areas where SFR rent growth is the hottest right now.


Fannie Mae Small Loans Cap Raised to $9 Million

Fannie Mae recently announced that its Small Loan cap has increased from $6 million to $9 million for all loans committed as of August 22, 2023. Multifamily borrowers and lenders have praised the change to the Fannie Mae Small Loans program, which will encourage greater investment in a rapidly growing sector where demand remains high despite market volatility.


The Top Five Emerging Metros for Retiree Relocation

As Baby Boomers reach retirement age, their evolving geographic preferences are strengthening housing markets and local economies in new locations, which feature attractive climates, relative affordability, and ample outdoor activities. With swelling populations of senior citizens, our top five emerging metropolitan areas for retiree relocation are fertile ground for multifamily real estate investment.


Ivan Kaufman Discusses Historical Strength of Multifamily During Recessions in NYSE Interview

Ivan Kaufman talks multifamily in NYSE Floor Talk interview

Arbor Realty Trust’s CEO explains what differentiates Arbor from other REITs.

View the NYSE interview.

Ivan Kaufman, the founder, chairman and CEO of Arbor Realty Trust, Inc. (NYSE:ABR), on the New York Stock Exchange program “Floor Talk,” provided insights about how Arbor has become one of the largest and most successful Fannie Mae and Freddie Mac licensed multifamily lenders in the United States.

COVID-19 has wreaked havoc in various CRE sectors and businesses. But undaunted by the pandemic, Arbor has continued to perform exceptionally well. Kaufman credited his senior management team members, who have worked with him for an average of over 25 years. Having weathered multiple market cycles, Arbor’s seasoned professionals know how to react and lead in times of unanticipated crises.

“It’s not when you get into a crisis what you do. It’s how you prepare for a crisis,” Kaufman stated. As Ivan recently discussed at his appearance in the NYU Capital Markets Leadership Series, Arbor anticipated the economic downturn despite the real estate market previously experiencing a historically extensive period of growth.

“Could we see COVID? No, but we did see a recession,” he said. “So, we had a lot of liquidity. We were in the right asset class. Our liability structures are outstanding. We were well prepared and could absorb quite a dislocation.”

The program host, Judy Shaw, asked what differentiates Arbor from its competitors.

Kaufman replied that Arbor has a variety of businesses. It earns income on interest and is also an operating company. It’s one of the largest government agency lenders in the country. Arbor’s servicing revenue is derived from an over $25 billion portfolio, producing consistent, reliable and recurring income for many years.

The corporation also receives gain on sales, has a thriving origination business, and earns interest from escrow balances. After experiencing multiple cycles, Arbor strategically focused its lending on multifamily and single-family rental (SFR) assets.

Kaufman pointed out that multifamily historically has shown resilience, even with the Great Recession, especially compared to other sectors. “It bounced back much more quickly, and the values continued to climb post-financial crisis,” he commented.

As seen in our Q3 Small Multifamily Investment Trends Report, even with the COVID-19 crisis, multifamily has maintained its strength with low vacancies and high rent collections.

“During the last 10 years, we experienced unprecedented rent growth of approximately 5% per year,” said Kaufman. “While the outlook is not as robust going forward, it’s still a great asset class with solid fundamentals and is expected to continue to perform well.” He projects future growth in value for the multifamily sector, noting low interest rates and cap rate compression.

Industrial and self-storage asset classes have also performed well throughout the coronavirus disruption. However, the real estate expert predicts difficult challenges still lie ahead for hospitality and that retail will undergo significant adjustments. Kaufman also forecasts softness in the office sector but added this will offer opportunities.

View the NYSE interview.


Check out Arbor in the News for discerning multifamily insights. Contact Arbor today to learn how our wide array of solutions can assist your strategic goals.