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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 as follows:
    • SNF/ILU: 80% (for profit, 85% (non-profit)
    • Mod rehab ALF/MC: 80% (for profit), 85% (non-profit)
  3. DSCR: 1.45x
Fixed Rate Yes
Eligible Properties The facility must have been completed or substantially rehabilitated for 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 addition 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 non-profit). 3 years ownership experience.
Ineligible Borrower Owner, operator, or any affiliates currently in bankruptcy, or filed/emerged from bankruptcy within prior 5 years.
Experience Owners, operators/management agents must demonstrate a successful track record commensurate with properties of similar type, size, and complexity. Similarly, an owner-operator must have at least 3 years ownership and operating experience. SNF Administrators must also have 3 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 Non-recourse.
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 1, declining 1% per year. Other pre-payment 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 Non-refundable 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 1 major building system.
Davis Bacon Not applicable to this program.
HUD Mortgage Insurance Premium 1% MIP upfront at closing. Annual MIP:

  • 0.65% for Market Rate Properties
  • 0.45% for Affordable Properties

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