Articles

Aging Baby Boomers Reshape the Housing Market

While the 2008 financial crisis prompted a cyclical shift in U.S. housing — impacting everything from home prices to who can qualify for a mortgage — an equally impactful demographic change was just taking shape. The unprecedented wave of Baby Boomers that began retiring would disrupt the balance of the housing market.

Articles

Secondary and Tertiary Markets Gain Ground on Primary Cities

As secondary and tertiary markets continue to gain parity with larger primary cities around the nation, they offer investors a significant potential for return on investment, even as the U.S. and global economic landscapes face notable headwinds.

Analysis

Small Multifamily Investment Snapshot — Q4 2022

The small multifamily sub-sector ended 2022 on a high note with originations falling just behind 2021’s peak. As economic storm clouds continue circling, small multifamily appears fortified from any reverberations that may result.

Press Releases

Arbor Realty Trust Reacts to Ningi Research Report

UNIONDALE, N.Y., March 14, 2023  (GLOBE NEWSWIRE) – Arbor Realty Trust (NYSE: ABR), announced today that the Company is in receipt of the purported “research” report that was published earlier today by Ningi Research, a short seller of Arbor stock. The report lacks merit and contains numerous inaccuracies, misstatements, and otherwise misleading allegations. This false Read the full article…

Articles

Arbor’s Leah Fisher Joins Global Sustainability Panel at InnovateESG

Arbor Senior Vice President, Special Projects, Governance and Risk, Leah Fisher recently spoke on a thought-provoking panel discussion at InnovateESG 2023, a conference focused on environmental, social, and governance missions, hosted by NYU Stern’s Chen Institute for Global Real Estate Finance.

Articles

Single-Family Rental Investment Snapshot — Q4 2022

SFR will maintain exposure to the cyclical disruption brought on by the housing market’s softness and rising interest rates, even though its structural growth outlook remains positive and unchanged.

GENERAL: 800.ARBOR.10

FHA® 231:

AGE RESTRICTED NEW CONSTRUCTION/SUB REHAB

Arbor provides FHA-insured, long-term, fixed-rate financing for new construction or substantial rehabilitation of seniors apartments restricted to age 62 and above. Applications typically processed as a two-stage application (preliminary application followed by firm application). HUD-experienced development teams may request “straight to firm” application, saving significant time by eliminating the preliminary application stage.

Loan Term & Amortization Construction loan period (interest-only), followed by 40-year permanent (fully amortizing); term not to exceed 75% of economic life
Maximum Loan Amount The lesser of:

  1. 85% of total eligible development costs (for market rate); 87% for LIHTC restricted; 90% for properties with at least 90% rental assistance; development cost includes value of land for new construction and as-is value of property for substantial rehabilitation
  2. FHA mortgage statutory per unit limits adjusted for local high cost factor or
  3. An amount that achieves a minimum debt service coverage: a) 1.176x DSC for market rate properties; b) 1.15x DSC for LIHTC restricted; and c) 1.11x DSC for properties having at least 90% rental assistance
Eligible Properties New construction or substantial rehabilitation for age-restricted properties (tenants limited to 62 years and over)
Eligible Borrowers Single asset entity (for profit or nonprofit)
Underwriting Occupancy Maximum economic underwriting occupancy of:

  • 93% for market rate properties (i.e., at least 20% market rate units, or LIHTC whose rents are < 10% below market rents)
  • 95% for LIHTC restrictions on at least 80% of units at rents at least 10% below market
  • 97% for properties having at least 90% rental assistance, or in-place rehabs with at least 90% occupancy and 90% LIHTC restricted at rents at least 10% below market
Tax & Insurance Escrows Monthly deposits required
Recourse Nonrecourse – construction and permanent
Commercial Space Maximum 25% of gross floor area and maximum 30% of effective gross income
Required Reports Market Study, Appraisal, Architect/Cost Review and Phase I Environmental; CPA reviewed financial or last fiscal year – sub rehab
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 project 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; 0.3% of the loan amount; 0.15% of the loan amount due to HUD at pre-application submission; 0.15% at firm application
HUD Inspection Fee 0.5% of the mortgage amount for new construction; 0.5% of the cost of repairs for substantial rehab
Legal/Closing Fee Borrower pays Arbor’s counsel fee and miscellaneous closing costs
Rehabilitation Qualifications Repairs must exceed $15,000 per unit (adjusted for local high cost factor) or replacement of two or more major building systems
Davis Bacon Davis Bacon labor standards and wage requirements apply to construction and rehab work
HUD Mortgage Insurance Premium (MIP) Annual MIP rates

  • Market rate properties 0.70%
  • Affordable properties: 0.35%
  • Broadly affordable or energy efficient properties: 0.25%

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