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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…

GENERAL: 800.ARBOR.10

FHA® 232/223(f):

HEALTHCARE REFINANCE, ACQUISTION OR MOD REHAB

Arbor provides FHA-insured, long-term, fixed-rate financing for refinance, acquisition or moderate renovation of assisted living and nursing facilities nationwide. Arbor uses the single-stage LEAN program to expedite underwriting and approval.

Loan Term & Amortization A maximum term of 35 years or 75% of the remaining economic life, fully amortizing
Maximum Loan Determined by the lowest of:

  1. 100% of refi transaction costs
  2. Maximum LTV:
    • SNF/ILU: 80% (for profit), 85% (nonprofit)
    • Mod rehab ALF/MC: 80% (for profit), 85% (nonprofit)
  3. DSCR: 1.45x
Fixed Rate Yes
Eligible Properties The facility must have been completed or substantially rehabilitated at least three years prior to the date of the application; projects with additions completed fewer than three years prior to HUD application submission are eligible if the additional square footage and number of beds were less than the original project s.f. and bed count
Ineligible Properties Life-care-fee CCRC; LTAC (long-term acute care), adult day or currently in bankruptcy
Eligible Borrower Single asset entity (for profit or nonprofit); three years’ ownership experience
Ineligible Borrower Owner, operator or any affiliates currently in bankruptcy, or filed/emerged from bankruptcy within prior five years
Experience Owners, operators/management agents must demonstrate a successful track record commensurate with properties of similar type, size and complexity; an owner-operator must have at least three years’ ownership and operating experience; SNF administrators must also have three years of experience
Cash Out Not allowed; however, may refinance prior cash-out loan, subject to varying debt seasoning requirements (0 – 2 years seasoning)
Tax & Insurance Escrows Monthly deposits required
Recourse Nonrecourse
Commercial Space Maximum 20% of gross floor area and maximum 20% of effective gross income
Required Reports Appraisal, Property Capital Needs Assessment (PCNA) and Phase I Environmental
Prepayment Typically 10% year one, declining 1% per year; other prepayment options available subject to market conditions
Assumable Subject to Arbor and HUD approval and payment of assumption fee
Good Faith Deposit Based on property type and loan size
Expense Escrow Yes – sufficient to cover Arbor’s expenses and third-party report costs
Origination Fee Negotiable
HUD Application Fee Nonrefundable fee of $3 per $1,000 (0.3%) of the mortgage amount due to HUD with the firm commitment submission package
HUD Inspection Fee $30 per unit when repairs are less than $3,000 per unit; 1% of the cost of the repairs otherwise
Legal/Closing Fee Borrower pays Arbor’s counsel fee and miscellaneous closing costs
Rehabilitation Qualifications Repairs not exceeding 5% of appraised value, or replacement of one major building system
Davis Bacon Not applicable to this program
HUD Mortgage Insurance Premium (MIP) 1% MIP upfront at closing. Annual MIP

  • 0.65% for market rate properties
  • 0.45% for affordable properties

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