Articles

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.

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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.

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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.

Articles

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.

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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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