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Small Balance Loans

As a leader in multifamily financing, we’re changing the way small apartment loans are done by giving you more choices, better terms, and a faster, simpler loan process. It’s financing that fits your needs.

Benefit from a combination of features not available anywhere else and get personal service from in-market experts who specialize in creative solutions for single and pooled loans. Plus, we’ll get you to the closing table on time. Whether your goal is to grow your portfolio, improve returns on existing assets, or meet other financial goals, we have the strength, expertise, and reliability to get you there.



    Up to $7.5 million in all markets.

    Note: Deals greater than $6 million and up to $7.5 million in small and very small Markets may be permitted subject to Freddie’s approval of an exception request.

    • Loan amount ≤ $6 million: no unit limitations.
    • Loan amount > $6 million and ≤ $7.5 million: up to 100 units (exceptions permitted above 100 units).

    Acquisition or refinance.


    20-year hybrid ARM with initial 5-, 7-, or 10-year fixed-rate period. 5-, 7-, or 10-year fixed-rate loan.


    Up to 30 years.


    Partial-term interest-only; full-term interest-only may be available.


    Declining schedules and yield maintenance available for all loan types; please refer to the chart on page 3.


    Up to $6 million: Individuals who are U.S. citizens; limited partnerships; limited liability companies; Single Asset Entities; Special Purpose Entities; tenancy in common with up to five unrelated members; and Trusts (irrevocable trusts and revocable trusts with an individual guarantor).

    Between $6 million and $7.5 million – Single Asset Entities.


    Non-recourse with standard carveout provisions required.


    Not Permitted.

    • Minimum Net Worth: Equal to the loan amount.
    • Minimum Liquidity: Equal to 9 months of principal and interest.

    Multifamily housing with five1 residential units or more, including:

    • Cooperatives in the five boroughs of New York City and Long Island.
    • Properties with tax abatements.
    • Seniors housing with no resident services.
    • Properties with space for certain commercial (non-residential) uses2.
    • Properties with tenant-based housing vouchers.
    • Low-Income Housing Tax Credit (LIHTC) properties with Land Use Restriction Agreements (LURAs) that are in either the final 24 months of the initial compliance period or the extended use period (investor must have exited)3.
    • Properties with local rent subsidies for 10% or fewer units where the subsidy is not contingent on the owner’s initial or ongoing certification of tenant eligibility3.
    • Properties with certain regulatory agreements that impose income and/or rent restrictions, provided all related funds have been disbursed3.

    1 Entity borrower required for properties in New Jersey with less than seven units.
    2 Contact your Freddie Mac representative for details.
    3 Available for properties with 75 units or less; requires pre-screen approval from Freddie Mac SBL Production.

    • Seniors housing with senior care services.
    • Student housing (greater than 50% concentration).
    • Military housing (greater than 50% concentration).
    • Properties with project-based housing assistance payment contracts (including project-based Section 8 HAP contracts).
    • LIHTC properties with LURAs in compliance years 1 through 12.
    • Historic Tax Credit (HTC) properties with a master lease structure.
    • Tax-exempt bonds Interest Reduction Payments (IRPs).

    Property must be stabilized at:
    A. 90% physical occupancy for the trailing 3-month average prior to Underwriting, or
    B. 85% physical occupancy for the trailing 3-month average prior to Underwriting if the subject property has any of the following characteristics:
    i. Property is recently built or renovated in a Top Market.
    ii. Property is <30 units.
    iii. Acquisition with all the following:

    1. Sophisticated acquiring sponsorship and management relative to current ownership.
    2. Appraised occupancy and/or rents materially higher than subject’s current operations.
    3. Subject property has not experienced volatile historical occupancy swings.
    4. No history of serious crime at the subject property.

    Underwritten replacement reserves will be determined based on a rating established in the streamlined PNA. The rating will estimate the level of improvements needed over the life of the loan. The rating scale will be similar to below:

    • Amount-200; Level-Low
    • Amount-250: Level-Moderate
    • Amount-300; Level-High
    • Real estate tax escrow deferred for deals with an LTV ratio of 65% or less. Insurance escrow deferred.
    • Replacement reserve escrow deferred.

    60- to 120-day rate-lock period available.


LTV and DCR requirements vary based on the market tier in which the property resides: Top Market, Standard Market, small Market, or Very small Market. To determine market tier, please consult the SBL Market Tiering list on our Originate and Underwrite page.

  • Top SBL Markets
    • Minimum Amortizing DCR: 1.20x1.
    • Maximum LTV: 80%.
  • Standard SBL Markets
    • Minimum Amortizing DCR: 1.25x.
    • Maximum LTV: 80%.
  • Small SBL Markets
    • Minimum Amortizing DCR: 1.30x1.
    • Maximum LTV: 70%2.
  • Very Small SBL Markets
    • Minimum Amortizing DCR: 1.40x1.
    • Maximum LTV: 70%2.

    1Minimum 1.25x Amortizing DCR for loans greater than $6 million.
    2Maximum 75% LTV for Acquisitions.


Full-Term IO or Full-Term IO during Fixed-Rate Period of Hybrid ARM.

  • Top and Standard SBL Markets
    • Add to the Baseline: 015x.
    • Maximum LTV: 65%.
  • Small and Very Small SBL Markets
    • Add to the Baseline: 010x.
    • Maximum LTV: 60%.
  • Maximum available Partial IO Period for small and Very Small SBL Markets is limited to:

    • 0 years on 5-year term.
    • 1 year for a 7-year term.
    • 2 years for a 10-year term/20-year hybrid.


  • Option 1
    • 5-Year: 54321.
    • 7-Year: 5544321
    • 10-Year: 5544332211.
  • Option 22
    • 5-Year: 321(3).
    • 7-Year: 3(2)2(2)1(3).
    • 10-Year: 3(3)2(3)1(4).
  • Option 33
    • 5-Year: (YM or 1%).
    • 7-Year: (YM or 1%).
    • 10-Year: (YM or 1%).
  • Option 45
    • 5-Year: 310(3).
    • 7-Year: N/A.
    • 10-Year: N/A.

  • Option 1
    • 5+15 Year: 54321, 1%.
    • 7+13 Year: 5544321, 1%.
    • 10+10 Year: 5544332211, 1%.
  • Option 22
    • 5+15 Year: 321(3), 1%.
    • 7+13 Year: 3(2)2(2)1(3), 1%.
    • 10+10 Year: 3(3)2(3)1(4), 1%.
  • Option 34
    • 5+15 Year: (YM or 1%), 1%.
    • 7+13 Year: (YM or 1%), 1%.
    • 10+10 Year: (YM or 1%), 1%.
  • Option 45
    • 5+15 Year: 310(3), 0%.
    • 7+13 Year: N/A.
    • 10+10 Year: N/A.

1Hybrid ARM consists of an initial fixed-rate period followed by a floating-rate period. During the floating-rate period the coupon is based on a 30-day average SOFR + 325 margin. Every six months, the floating rate may increase or decrease by 1%, never be less than a floor of the initial fixed interest rate and never be greater than a maximum lifetime cap of the initial fixed interest rate + 5%.
2Prepay description: For example, for a Hybrid ARM “321(3), 1%” refers to 3% for year 1 of the fixed-rate period, 2% for year 2, 1% for the next 3 years, then 1% during the remaining floating-rate period.
3Higher of yield maintenance (YM) or 1% during the YM period. See Fixed Rate notes for details.
4With respect to Hybrid ARM mortgage loans with yield maintenance, for any prepayment made during the yield maintenance period, the prepayment charge will initially be the greater of (i) 1.0% of the unpaid principal balance or (ii) yield maintenance. Any prepayment made after the yield maintenance period, the prepayment charge will be 1.0% of the unpaid principal balance. See Hybrid ARM notes for details.
5Top Markets only on 5-year fixed and Hybrid ARMs.

In its prequalifying review, Lument will attempt to estimate both the loan amount and the fees and costs associated with the transaction. Actual loan amounts and actual fees and expenses may vary from the prequalifying estimates. A prequalifying estimate is not a commitment to make a loan.

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