FREDDIE MAC® Small Balance Loan

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Arbor’s Freddie Mac Small Balance Loan program streamlines the entire loan process for multifamily acquisition and refinancing loans ranging from $1 million to $6 million.


Loan Amount
$1,000,000 to $6,000,000

Between $6 million and $7.5 million for properties with 75 units or less in Top and Standard SBL Markets

Loan Term Fixed-rate loan terms of 5, 7 or 10 years. Hybrid ARM loan terms of 20 years with initial 5, 7 or 10 years fixed.
Amortization Up to 30 Years. Interest-only options also available.
Minimum DSC 1.20 in Top Markets;
1.25 in Standard Markets;
1.30 in Small Markets;
1.40 in Very Small Markets.
Maximum LTV 80% in Top and Standard Markets;
75% if acquisition in Small/Very Small Markets;
70% if cash-out refinance in Small/Very Small Markets.
Full-Term Interest Only DSC/LTV Thresholds Minimum DSC 1.35 / Maximum LTV 65% in Top Markets;
Minimum DSC 1.40 / Maximum LTV 65% in Standard Markets;
Minimum DSC 1.40 / Maximum LTV 60% in Small Markets;
Minimum DSC 1.50 / Maximum LTV 60% in Very Small Markets. Minimum 1.25x amortizing DCR for loans greater than $6 million
Rate Structure Fixed and hybrid ARM loan terms available.
Eligible Property Multifamily, minimum five residential units.
Eligible Borrower Up to $6 million – Individuals who are U.S. citizens; LPs; LLCs; SAEs; SPEs; TICs with up to 5 unrelated members; and trusts (irrevocable trusts and revocable trusts with warm body guarantor). Between $6 million and $7.5 million – Single Asset Entities
Occupancy Requirement 90% physical occupancy over the trailing 3 month period.
85% physical occupancy for the trailing 3-month average prior to Underwriting if the subject property has any of the following characteristics:
Property is recently built or renovated in a Top Market
Property is <30 units
Acquisition with all of the following:
Sophisticated acquiring sponsorship and management relative to current ownership;
Appraised occupancy and/or rents materially higher than subject’s current operations;
Subject property has not experienced volatile historical occupancy swings; and
No history of serious crime at the subject property.
Tax and Insurance Escrows Real Estate tax escrow deferred for deals with 65% LTV or less. Insurance escrow deferred. Replacement reserve escrow deferred.
Replacement Reserves Underwritten at a minimum $200 per unit per annum.
Recourse Non-recourse with standard carve-out provisions required.
Commercial Space Allowed up to 40% of total net rental income; no more than 40% of building’s square footage.
Required Reports Appraisal, Properly Condition Assessment, Phase I Environmental, Zoning, Insect and Flood
Prepayment Declining schedules and yield maintenance available for all loan types. Defeasance available for fixed-rate loans only. All prepayment options are open for prepayment without penalty 3 months prior to maturity.
Assumable Subject to approval and 1% fee.
Pricing Tiered Pricing Matrix. More favorable terms available for higher DSC and lower LTV.
Rate Lock A non-refundable application fee (0.1% of loan amount in all markets except Top Markets) will be collected at time of rate lock. 60- to 120-day rate-lock period available.
Good Faith Deposit 1% of loan amount due upon acceptance and execution of the SBL Rate Lock Application; refundable post-closing.
2% of loan amount for Early Rate locks
Top Markets New York-Newark-Jersey City (NY-NJ-PA), Boston-Cambridge-Newton (MANH), Washington, DC-Arlington-Alexandria (DC-VA-MD-WV), ChicagoNaperville-Elgin (IL-IN-WI), Los Angeles-Long Beach-Anaheim (CA), San Francisco-Oakland-Hayward (CA), San Jose-Sunnyvale-Santa Clara (CA), San Diego-Carlsbad (CA), Denver-Aurora-Lakewood (CO), Bridgeport-StamfordNorwalk (CT), Miami-Fort Lauderdale-West Palm Beach (FL), Minneapolis-St. Paul-Bloomington (MN-WI), Portland-Vancouver-Hillsboro (OR-WA), and SeattleTacoma-Bellevue (WA)
LIHTC Low-Income Housing Tax Credit (LIHTC) properties (50 units or less) with Land Use Restriction Agreements (LURAs) in the extended-use period or in the final 24 months of the initial compliance period (in both cases, provided the tax credit investor has exited the project). Properties with certain regulatory agreements with local, state, or federal housing authorities that impose income and/or rent restrictions.
Arbor Commercial Mortgage | | 800.ARBOR.10