Small Balance Multifamily Loans

Small Balance Multifamily Loans

Small Balance Multifamily Loans are popular financing options for apartments with less than 100 units.  Assets with over 100 units may be permitted with approval.

The defining feature of small balance multifamily loans is their loan amount, which typically falls below the threshold of traditional commercial real estate financing. This makes them particularly attractive to individual investors, small business owners, or those looking to enter the real estate market without the financial burden of larger loans.

The maximum loan amounts are $6 million for Fannie Mae’s Small Balance program, and $7.5 million for Freddie Mac.

  • Existing stabilized multi-family properties
  • Up to 30 years amortization
  • Maximum LTV 80%
  • Non-recourse available with standard carve outs
  • Interest only available

Loans for 5-100 Units

These programs offer generous loan terms and cater to smaller properties that are often overlooked by large lenders.  Investors also enjoy flexible financing options without third party reporting requirements and complex documentation.

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Small Balance Multifamily Loans

Freddie Mac SB Multifamily

Freddie Mac Small Balance Multifamily Loans allow investors to finance up to $7.5 M. Offering non-recourse, interest only options, investors can borrow up to 80% LTV in certain markets.
 

Fannie Mae Small Loans

Fannie Mae's Small Loan Program is also designed for owners of smaller apartment buildings. Acquisition and refinance loans range from $750,000 to $6 million, for 5-30 years.
 

Drawbacks of SBMF loans include:

  • Higher origination fees: SBMF loans typically have higher origination fees than traditional multifamily loans.
  • Limited availability: SBMF loans are not as widely available as traditional multifamily loans.
  • Stricter underwriting requirements: SBMF lenders may have stricter underwriting requirements than traditional multifamily lenders.

Overall, Small Balance Multifamily loans can be a valuable financing option for investors who are looking to purchase, refinance, or renovate multifamily properties. However, it is important to carefully consider the key features, benefits, and drawbacks of SBMF loans before making a decision.

Small Balance Multifamily Loans for 5 to 100 Units

Small balance multifamily loans are a vital financial tool for investors looking to purchase or refinance properties with fewer units, typically ranging from two to 50. These loans serve as a cornerstone for real estate investment strategies, offering flexibility, accessibility, and competitive terms tailored to the needs of small-scale multifamily property owners.

To learn more about these programs, call 949-614-1300 or simple contact one of our advisors.