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Everything You Need to Know About Small Multifamily Lending

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Ivan Kaufman shares with you everything you need to know about small multifamily 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 this presentation you will what small multifamily loans are, how to find the right small balance loan to fit your needs, and more.

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Everything You Need to Know About Small Multifamily Lending

  1. 1. Everything You Need to Know About Small Multifamily Lending $1,000,000 to $5,000,000 Loans ARBOR.COM • 1.800.ARBOR.10
  2. 2. Today’s Speakers ARBOR.COM • 1.800.ARBOR.10 2 Dustin Pevear - Speaker VP, Operations & Processing Michael Noll – Speaker Originator Sales Associate Charles Ostroff — Moderator SVP, Chief Underwriter & Credit Officer
  3. 3. Arbor & Small Multifamily Loan Lending ARBOR.COM • 1.800.ARBOR.10 3 • 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.
  4. 4. What is a Small Multifamily Loan? ARBOR.COM • 1.800.ARBOR.10 4 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*:
  5. 5. Finding the Right Small Balance Loan to Fit Your Needs
  6. 6. Arbor’s Most Active Small Loan Markets
  7. 7. Benefits of Small Multifamily Loans ARBOR.COM • 1.800.ARBOR.10 7 Non-Recourse Pre-Payment Flexibility Interest-Only Reduced Fees Expeditious Processing 1 2 5 4 3
  8. 8. 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
  9. 9. Arbor & Fannie Mae Small Loan Case Study ARBOR.COM • 1.800.ARBOR.10 9 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.
  10. 10. Arbor & Freddie Mac SBL Case Study - Oregon ARBOR.COM • 1.800.ARBOR.10 10 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
  11. 11. Where to Begin…
  12. 12. Checklist for Getting Started ARBOR.COM • 1.800.ARBOR.10 12 Rent Roll Historical Operating Statements Financial Statements Real Estate-Owned (REO) Schedule Property Details Purchase & Sale Agreement (ACQ) Cost Basis/Length of Ownership (REFI)
  13. 13. Technology in the Small Multifamily Loan Space
  14. 14. Meet ALEX (Arbor LoanExpress) ARBOR.COM • 1.800.ARBOR.10 14 The commercial real estate industry’s first agency online lending platform for brokers, borrowers, and correspondent lenders.
  15. 15. The Four-Step ALEX Process ARBOR.COM • 1.800.ARBOR.10 15
  16. 16. ALEX Takes the Guesswork out of Processing ARBOR.COM • 1.800.ARBOR.10 16
  17. 17. Benefits of ALEX ARBOR.COM • 1.800.ARBOR.10 17 Faster Loan Evaluation Accessible & User Friendly E-Signature Streamlined Documentation Real-Time Diligence Tracking
  18. 18. Audience Q & A Dustin Pevear - Speaker VP, Operations & Processing Michael Noll – Speaker Originator Sales Associate Charles Ostroff — Moderator SVP, Chief Underwriter & Credit Officer The floor is open to submit questions in the ‘Questions’ tab of your control panel. ARBOR.COM • 1.800.ARBOR.10 18
  19. 19. Small Multifamily Loan Research ARBOR.COM • 1.800.ARBOR.10 19 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
  20. 20. Stay Informed with ALEX Chatter ARBOR.COM • 1.800.ARBOR.10 20 For the leading source of small multifamily news, research and insight, visit ALEX Chatter. ArborLoanExpress.com/chatter
  21. 21. Thank You – Let’s Stay in Touch ARBOR.COM • 1.800.ARBOR.10 21 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@arbor.com Have any financing questions? Speak to a loan officer one-on-one Want to learn more about Arbor? Visit Arbor.com (844) 253-9397 or visit Arborloanexpress.com Arbor.com

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