everything you need to know about small multifamily lending

Everything You Need to Know About Small Multifamily Lending $1,000,000 to $5,000,000 Loans

ARBOR.COM • 1.800.ARBOR.10

Today’s Speakers


Dustin Pevear - SpeakerVP, Operations & Processing

Michael Noll – SpeakerOriginator Sales Associate

Charles Ostroff — ModeratorSVP, Chief Underwriter & Credit Officer

Arbor & Small Multifamily Loan Lending


• As a national direct lender that provides debt capital for the multifamily and commercial real estate industries, Arbor partnered with Fannie Mae to develop the first ever agency Small Balance Mortgage Loan program two decades ago.

• In 2015, we were one of a few select lenders asked to participate in Freddie Mac’s Small Balance Loan program.

• Today, we are one of a select few lenders offering Freddie Mac and Fannie Mae small loans nationwide.

What is a Small Multifamily Loan?


Small balance multifamily lending has quadrupled since 2009 from $11.1B to $44.3B.

Currently, the small balance market represents 65% of multifamily loans and 20% of overall multifamily volume.

In 2013, for example, 46% of all multifamily loans were less than $5 million each.

Fannie Mae Small Loan

• Up to $3M Nationwide. Up to $5M in Strong Markets

Freddie Mac Small Balance Loan (SBL)

• Up to $5M Nationwide. Up to $7.5M in Top and Standard Markets (subject to affordability calculations)

* Source: Chandan Economics, 2016

Key Stats*:

Finding the Right Small Balance Loan to Fit Your Needs

Arbor’s Most Active Small Loan Markets

Benefits of Small Multifamily Loans


Non-Recourse

Pre-Payment Flexibility

Interest-Only

Reduced Fees

Expeditious Processing

1

2

5

4

3

Small Multifamily Loan Program Summaries

8

• IO (5, 7, 10 year)

Interest Only – Full Leverage Options

• Max LTV – ACQ/REFI• Min DSCR

Maximum Leverage

• Max LTV• Min DSCR

Full Term Interest Only

Fannie Mae Small Loan & Freddie Mac Small Balance Loan Options

Arbor & Fannie Mae Small Loan Case Study


REFINANCE• 32 units in Buffalo, NY• $2.67 million loan• $1.4 million cash-out• 7/6 ARM

Cash-out is used to pursue other real estate investments, recoup equity, and further improve real estate assets.

http://www.arbor.com/

Arbor & Freddie Mac SBL Case Study - Oregon


REFINANCE• 42 units in Portland, OR• $3 million loan• $1.5 million cash-out• 5-year hybrid ARM• 1-year interest-only

PURCHASE 1• 22 units in Portland, OR• $1.3 million• 7-year hybrid ARM• 2 years interest-only

PURCHASE 2• 20 units in Portland, OR• $1.3 million• 5-year hybrid ARM• 1 year interest-only

PURCHASE 3• 26 units in Portland, OR• $1.3 million• 7-year hybrid ARM• 2 years interest-only

http://www.arbor.com/

Where to Begin…

Checklist for Getting Started


Rent Roll

Historical Operating Statements

Financial Statements

Real Estate-Owned (REO) Schedule

Property Details

Purchase & Sale Agreement (ACQ)

Cost Basis/Length of Ownership (REFI)

Technology in the Small Multifamily Loan Space

Meet ALEX (Arbor LoanExpress)


The commercial real estate industry’s first agency online lending platform for brokers, borrowers, and correspondent lenders.

The Four-Step ALEX Process


ALEX Takes the Guesswork out of Processing


Benefits of ALEX


Faster Loan Evaluation

Accessible & User Friendly

E-Signature

Streamlined Documentation

Real-Time Diligence Tracking

Audience Q & A

Dustin Pevear - SpeakerVP, Operations & Processing

Michael Noll – SpeakerOriginator Sales Associate

Charles Ostroff — ModeratorSVP, Chief Underwriter & Credit Officer

The floor is open to submit questions in the ‘Questions’ tab of your control panel.


Small Multifamily Loan Research


For the latest on the small balance landscape, be sure to download our Q2 2016 Small Balance Multifamily Investment Trends Report.

www.ArborLoanExpress.com/2Q16MultifamilyInvestmentTrends

Stay Informed with ALEX Chatter


For the leading source of small multifamily news, research and insight, visit ALEX Chatter.

ArborLoanExpress.com/chatter

Thank You – Let’s Stay in Touch


Thank you for joining us today. This concludes our webinar.

Didn’t get to your question? Let’s get in touch. You can email us at [email protected]

Have any financing questions? Speak to a

loan officer one-on-one

Want to learn more about Arbor?

Visit Arbor.com

(844) 253-9397or visit

Arborloanexpress.comArbor.com