||Actual construction period plus 40 years (fully amortizing with interest only payable during construction period). Term not to exceed 75% of economic life
|Maximum Loan Amount
The lessor of:
- 85% of total eligible development costs (87% for affordable) (90% for 90% project-based rental assistance), replacement cost includes value of land for new construction and as-is value of property for substantial rehabilitation.
- FHA mortgage statutory per unit limits adjusted for local high cost factor,
- An amount that achieves a minimum debt service coverage, as follows: a) 1.176x DSC for market rate properties b) 1.15x DSC for affordable transactions; and c) 1.11x DSC for projects with 90% or greater rental assistance.
||New construction or substantial rehabilitation for age-restricted properties (tenants limited to 62 years and over)
||Single Asset Entity (for profit or non-profit)
- Maximum economic occupancy of 93% for market rate properties
- 95% for LIHTC properties having at least 80% LIHTC set aside, and rents at least 10% below markets
- 97% for properties with at least 90% rental assistance contracts (or 90% LIHTC set aside) with rents at least 10% below market.
|Tax and Insurance Escrows
||Monthly deposits required
||Non-recourse – Construction and Permanent
||Maximum 10% of gross floor area and maximum 15% of potential gross income
||Market Study, Appraisal, Architect/Cost Review and Phase I. CPA reviewed financial or last fiscal year – sub rehab.
||Negotiable. Generally two-year lockout with a 10% to 1% declining pre-payment penalty. Other pre-payment options available.
||Subject to Arbor and HUD approval and payment of assumption fee
|Good Faith Deposit
||Negotiable based on project type
||Yes – sufficient to cover Arbor’s expenses and third-party report costs
|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. For market rate pre-applications, a non-refundable review fee of 15 bps (50% of the firm commitment application V72016 fee) is due to HUD with the submission of the pre-application package.
|HUD Inspection Fee
||0.5% of the mortgage amount for new construction. 0.5% of the cost of the repairs for substantial rehab
||Borrower pays Arbor’s counsel fee and miscellaneous closing costs.
||Repairs must exceed $15,000 per unit (adjusted for local high cost factor) or replacement of 2 or more major building systems.
||Davis Bacon labor standards and wage requirements apply to construction and rehab work.
|HUD Mortgage Insurance Premium
Annual MIP Rates:
- Market Rate Properties 0.70%
- Affordable Properties: 0.35%
- Broadly Affordable or Energy Efficient Properties: 0.25%