About lender
Arbor Realty Trust, Inc. is a nationwide REIT and direct lender, providing small, FHA, and Bridge loans, real estate investment trust, and various servicing programs for multifamily, single-family rental (SFR), seniors housing, and other diverse commercial real estate assets. Arbor's loan product platform also includes CMBS, mezzanine, and preferred equity lending.
In addition, Arbor Realty Trust may also directly acquire real property and invest in real estate and mortgage-related securities. The company has two business segments, Structured Business and Agency Business.
Arbor Realty Trust was incorporated in 2003 and began its operations via a 144A private equity offering. Later, in 2004, the company transitioned from a private to a public company.
Nowadays, Arbor Realty Trust is headquartered in New York. The company is a Fannie Mae DUS lender, Freddie Mac Optigo Seller/Servicer, and an approved FHA Multifamily Accelerated Processing (MAP) lender. Additionally, Arbor Realty Trust is externally managed and advised by Arbor Commercial Mortgage, LLC.
Pros and cons
Pros
- Arbor Realty Trust is an approved FHA Multifamily Accelerated Processing Lender that provides access to flexible FHA loan programs on an expedited basis and financing for acquisitions, refinancing, moderate rehabilitation, substantial rehabilitation, or new construction.
- Mortgage loans offered by the company generally would not be subject to federal corporate taxes if Arbor Realty Trust distributes at least 90% of its taxable income to stockholders. That means that customers won't be charged applicable fees and payments as well.
- Unlike many other lenders, Arbor Realty Trust has zero banking account deposit requirements.
- The company has very flexible repayment capabilities. There are 12-, 15-, 20-, 25- and 30-year, fixed- and floating-rate financing options for acquisitions and refinancing with 30 years of amortization.
- Arbor Realty Trust offers personalized treatment as a long-term partner, with loan customization and flexibility approach.
- The company is renowned for its multifamily loan experience, expertise, and reputation.
- Arbor Realty Trust has a Debt Service Coverage Ratio of 1.25. Lower DSCRs can be considered as well if payment is supported by pre-funded interest reserves or guarantees.
- There are long-term sponsorship programs that offer an established track record and appropriate net worth and liquidity commensurate with the transaction.
Cons
- Arbor Realty Trust does not disclose exact interest rates on its website. It claims that it has a floating rate over the CME SOFR index. Note that its spreads vary based on risk and terms.
- Arbor Realty Trust has regular tax and insurance escrows. It requires monthly deposits.
- Generally, Arbor Realty Trust offers no prepayment options.
- Arbor Realty Trust charges origination and exit fees for some services.
- For some of its financial options, the company requires appraisal, property, condition assessment, and environmental reports.
- The company requires monthly deposits for replacement reserves.
- Arbor Realty Trust currently does not offer a dividend reinvestment program or a direct stock purchase plan. Note that shares can be purchased through a broker of customers' choice.
Conclusion
Considering all pros and cons, it is a trustworthy lender that has a vast experience in the field of loan programs. The biggest reasons behind Arbor Realty Trust's staggering success are multiple loan options, no banking account requirement, and great services. However, customers should take into account that the company charges fees for some loan programs and is not always upfront about its interest rates, making it rather difficult for a clientele to choose the most appropriate lender.
Terms and conditions
Arbor is one of the nation's leading small multifamily lenders, specializing in serving loans in amounts of $1 million up to $7.5 millions.
Loan amounts on its other services vary from $15 to $20 millions, with loan terms generally from 1 to 3 years. Extension options are available as well. Also, Arbor Realty Trust has an amortization program which is determined individually in every case. Typically, it implies getting interest-only payments.
Funding a loan
Arbor Realty Trust sends funds directly to a customer's checking or banking account. Usually, clientele can get money within not more than seven business days after approval. Generally, the operational time of the lender is from 3 to 7 months.
