The quick read: For a 5-to-50-unit apartment building, Freddie Mac's Conventional Small program now covers loans of generally $2 million to $10 million at up to 80% loan-to-value (LTV) and a 1.25x minimum debt service coverage ratio (DSCR), and it is the program that replaced Freddie's old Small Balance Loan (SBL) line. Fannie Mae's Small Mortgage Loan program covers loans up to $9 million with no published minimum, also capping at 80% maximum LTV and a 1.25x minimum DSCR for a stabilized property of 5 or more units. Freddie Mac's current multifamily product page no longer lists SBL among its products, so a page still describing standalone SBL terms is describing a retired program. For a building priced at $1 million to $2 million, Freddie's own term sheet states a floor of generally $2 million, which leaves Fannie Mae's program as the only agency range that could reach that size, though Fannie publishes no confirmed minimum either. Above $2 million, both agencies compete directly, and the better fit turns on your loan term, your interest-only need, and whether a bank or credit union portfolio quote beats either one.
This guide lines up both programs' own published term sheets side by side, adds the community bank and credit union portfolio loan as the reference execution below the agency floors, and closes on which execution to price first at three loan sizes. For a broader primer on financing this size band, see how to finance a 5-to-20-unit apartment building; for how loan terms compare across every lender type, see which lender type offers the best commercial real estate loan terms; and for how a small agency loan stacks up against a conduit loan, see can you get a CMBS loan under $5 million.
What happened to Freddie Mac's Small Balance Loan program?
Freddie Mac's Small Balance Loan (SBL) program is no longer a standalone offering: Freddie Mac's current multifamily product page does not list SBL among its products, and its Conventional Small term sheet, footer-dated 4/26, describes the loans Freddie now writes in that size band as generally $2 million to $10 million on predominantly market-rate properties of 5 to 50 units.
Any page you find still describing a separate SBL program with its own eligibility rules and pricing grid is describing a retired product, not the one Freddie Mac quotes today.
The practical effect is that the small-loan search that used to split into "SBL or Conventional" is now one Freddie Mac program with one term sheet. That consolidation is also why the comparison in this guide only has two agency rows, Fannie Mae's Small Mortgage Loan and Freddie Mac's Conventional Small, instead of three.
How do Fannie Mae and Freddie Mac small-loan programs compare on terms?
Fannie Mae's Small Mortgage Loan program and Freddie Mac's Conventional Small program both cap leverage at 80% LTV and both set a 1.25x minimum DSCR floor, but they diverge on loan-size range, term length, prepayment structure, and how leverage steps down on shorter terms or interest-only structures.
The table below states a figure only where each program's own term sheet or guide states it, and a community bank or credit union portfolio loan is added as the reference execution for a deal that falls outside either agency's published range.
| Program | Loan size | Max LTV | Min DSCR | Unit count | Term & amortization | Prepayment | Recourse | Who originates |
|---|---|---|---|---|---|---|---|---|
| Fannie Mae Small Mortgage Loan | Up to $9 million; no published minimum | 80% | 1.25x | 5 or more units; existing, stabilized | Fixed- and variable-rate options; term length and amortization are not stated on the cited term sheet, confirm with the lender | Yield maintenance and a declining prepayment premium | Non-recourse available, standard carve-outs apply | A Fannie Mae DUS lender |
| Freddie Mac Conventional Small | Generally $2 million to $10 million | 80% on 7-year and longer terms (amortizing and partial interest-only); 75% on 5-year to under-7-year terms; 65% to 70% full-term interest-only | 1.25x minimum amortizing DCR on every term | Predominantly market-rate properties of 5 to 50 units | 5, 7, 10, 12 or 15-year terms; 30-year maximum amortization | Yield maintenance until securitized, then a 2-year lockout, then defeasance; step-down and yield-maintenance-without-defeasance available at an additional cost; no prepayment premium in the final 90 days | Non-recourse except standard carve-out provisions | A Freddie Mac Optigo lender |
| Bank or credit union portfolio loan | No public, dated minimum or maximum; sized under the institution's own credit policy | No public, dated figure | No public, dated figure | No public, dated limit | Typically a shorter fixed term with a balloon payment; set by the institution | Set by the institution; often a step-down penalty rather than defeasance | Often full or partial recourse; set by the institution | The bank or credit union directly |
Dates: Fannie Mae figures come from the Small Mortgage Loan Program term sheet (multifamily.fanniemae.com) and the Multifamily Selling and Servicing Guide, Part III Chapter 9, effective September 28, 2026. Freddie Mac figures come from the Optigo Conventional Small term sheet, footer-dated 4/26 (April 2026). No portfolio lender publishes a term sheet, so the bank and credit union row reports what is not public rather than a figure.
A federally insured credit union is also bound by an aggregate cap on its business lending as a whole, separate from any single loan's terms: the aggregate limit on a credit union's net member business loan balances is the lesser of 1.75 times its actual net worth or 1.75 times the minimum net worth required, with statutory exemptions. That cap can affect whether a credit union has room for your loan at all, which is a question worth asking before you submit a package.
What is the agency-only gap between $1 million and $2 million?
A building priced between $1 million and $2 million sits below Freddie Mac's stated Conventional Small floor of generally $2 million, which means Freddie's own term sheet does not claim to reach it, while Fannie Mae's Small Mortgage Loan program publishes an upper limit of $9 million and no stated minimum at all.
That asymmetry is the practical reason this size band now has only a Fannie-shaped agency question to ask, not a confirmed Fannie-shaped agency answer.
No public, dated source confirms that a Fannie Mae DUS lender will in practice originate a Small Mortgage Loan below $2 million, because the fixed costs of an agency file, underwriting, third-party reports, and loan documentation, do not shrink with the loan balance, so a lender may decline to quote a very small file even though the program's own ceiling would allow it. Ask the DUS lender directly whether your specific balance clears its practical minimum, and price a bank or credit union portfolio loan in parallel so you are not waiting on one answer.
Which execution should you price first at $1.5 million, $3 million, and $8 million?
Which execution to price first depends on where your loan size sits against each program's published range: a $1.5 million loan sits below Freddie's stated floor and only inside Fannie's stated ceiling, while $3 million and $8 million loans sit inside both agency ranges.
The $8 million loan, though, sits closer to Freddie's $10 million ceiling and Fannie's $9 million ceiling at once. Treat the size band as the first filter, then let term length and interest-only need decide which agency program, if either, actually prices better.
At $1.5 million, start with a Fannie Mae DUS lender, since Freddie's own term sheet puts $1.5 million below its stated range, but get a bank or credit union portfolio quote running at the same time. The fixed-cost logic that makes a small CMBS loan expensive applies to a small agency loan too, and a local portfolio lender may beat the agency execution once documentation and reporting costs are counted.
At $3 million, both Fannie Mae and Freddie Mac are in range, so this is the size where a side-by-side actually matters. If the property can carry a 7-year or longer term, Freddie's 80% maximum LTV at a 1.25x DSCR matches Fannie's, so the decision turns on prepayment preference, Freddie's yield maintenance into a hard lockout and later defeasance, against Fannie's yield maintenance and declining prepayment premium, and on which agency's DUS or Optigo lender quotes faster.
At $8 million, both programs still apply, but check the term length before assuming you get the higher leverage: Freddie's 80% LTV applies only on 7-year and longer terms, dropping to 75% on a 5-year to under-7-year term and to 65-70% on a full-term interest-only structure, and Fannie's term sheet states the same 80% ceiling without breaking it out by term length on the cited page. If you need a shorter term or full-term interest-only, confirm which program actually holds 80% LTV at that structure before assuming the headline number applies to your deal.
What does an agency small-loan submission need to show?
An agency small-loan submission needs to show the property's trailing 12 months of income and expenses, a current rent roll, sponsor experience, sponsor net worth and liquidity, and a property condition assessment, because both agencies underwrite the borrower and the key principals alongside the real estate itself.
Fannie Mae's Multifamily Guide states the standard explicitly for its Small Mortgage Loan program: the combined net worth of the borrower and all key principals must equal or exceed the original loan amount, and their combined post-closing liquid assets, excluding any cash-out proceeds, must equal at least 9 monthly principal-and-interest payments on the loan.
Bring a trailing-12 operating statement, a current rent roll, a schedule of the sponsor's owned real estate, and recent financial statements for every key principal before you approach either agency's lender network. A bank or credit union will usually ask for the same core package, even though its own net worth and liquidity thresholds are set by internal policy rather than a published guide.
How do you get lenders competing for this loan?
You get lenders competing for a small apartment loan by sending the same complete file to a Fannie Mae DUS lender, a Freddie Mac Optigo lender, and a local bank or credit union at once, so each one prices the identical facts instead of three different partial pictures.
That file covers trailing financials, rent roll, sponsor net worth and liquidity, and a property condition summary.
YieldStack is a commercial mortgage brokerage, not a lender. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed. YieldStack arranges commercial real estate financing nationwide.
Bring: trailing 12-month operating statement, current rent roll, sponsor schedule of real estate owned, and recent financial statements for every key principal. Tell the lender: your preferred term length and whether you need interest-only, since that decision alone can change which program's maximum LTV actually applies to your file.
Submit your small apartment loan for lender review to see which program and which lender type quotes it best.
The bottom line
Freddie Mac's Small Balance Loan program is retired; Freddie's current small-loan product is Conventional Small, generally $2 million to $10 million at up to 80% LTV and a 1.25x minimum DSCR on 5-to-50-unit properties. Fannie Mae's Small Mortgage Loan program covers up to $9 million with no published minimum, at the same 80% LTV and 1.25x DSCR ceiling for 5-plus-unit stabilized properties. A $1 million to $2 million building falls below Freddie's stated floor, leaving Fannie as the only confirmed agency range to ask about; a $3 million to $8 million building can price both agencies against each other and against a bank or credit union portfolio quote. Bring the same trailing-12, rent roll, sponsor net worth and liquidity package to every lender type, and let your term length and interest-only need decide which program's leverage actually applies.