Small-balance lenders quote smaller CRE loans, mostly multifamily and small mixed-use. Freddie Mac Conventional Small generally covers $2 million to $10 million. Fannie Mae’s small-loan program, bank programs, and debt-fund bridge programs also cover this range. Freddie Mac stopped taking new Small Balance Loan applications on April 30, 2026.
What does small-balance multifamily financing cover?
Freddie Mac Conventional Small, generally $2 million to $10 million, is the current small multifamily execution. Fannie Mae’s small-loan program covers similar properties with its own sizing tests. The prior Optigo Small Balance Loan program stopped taking applications on April 30, 2026. Both are originated by the existing DUS and Optigo lender options through small-loan desks.
Beyond agency, several large bank SBL programs (typically $1M to $10M) write conventional multifamily and small mixed-use perm with bank standardization. A growing set of debt-fund SBL programs writes small-balance bridge for value-add multifamily where the sponsor needs floating-rate flexibility.
Where SBL is the right answer
Small multifamily refi or acquisition where a competitive agency or bank quote at $2M to $7M is more useful than a custom large-balance structure. Sponsors with portfolios of small multifamily who can run multiple deals through the same SBL desk and compound the relationship. Properties in tertiary markets where Freddie Mac Conventional Small is one of the few competitively priced options.
Loan documents are standardized and minimally negotiable.
Where SBL is less competitive
Loans above the Conventional Small maximum, generally $10 million, where the standard agency or bank execution is the quote. Complex sponsor or asset stories that need underwriting outside the SBL credit box. Construction (SBL programs do not cover construction). Non-multifamily commercial above $5M (SBL programs are predominantly multifamily).
Customization. SBL is a programmatic product. Sponsors who want material structural negotiation should expect to size up the loan or use a different program.
Decision-maker access
Most agency SBL desks have dedicated production, underwriting, and processing teams separate from large-balance agency. The relationship is with the SBL desk lead, not the firm's senior production officer. Sponsors with $25M+ of cumulative SBL business typically reach the desk lead directly.
Bank SBL programs are typically housed in the commercial real estate group with a dedicated SBL underwriter. Decision-maker access is similar to community-bank perm, working through the relationship banker to a centralized credit officer.
Frequently asked questions
Is SBL non-recourse?
Freddie Mac Conventional Small and Fannie Mae small loans are non-recourse with bad-boy carve-outs, same as their larger agency counterparts. Bank SBL programs typically carry full or partial recourse. Debt-fund SBL bridge is generally non-recourse with completion or repayment guarantees on bridge.
What is the smallest deal worth running competitively?
Loans below roughly $1M generally do not justify an advisor-led competitive process; the borrower-side fee structure and the lender options supply do not work below that floor. From $1M to $5M, SBL desks can be quoted side-by-side meaningfully.
Can SBL convert to large-balance over time?
Yes, sponsors who scale a portfolio above the SBL ceiling often refinance into large-balance agency or bank execution, with sponsorship data and operating history compiled from the SBL relationships supporting the upsize.
Sources
- Optigo lending program disclosures · Freddie Mac Multifamily · current
- Delegated Underwriting and Servicing (DUS) program disclosures · Fannie Mae · current
- Multifamily Market Commentary · Fannie Mae Economic & Strategic Research · 2026-Q1