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Small Balance Loan Program

Arbor’s Freddie Mac Small Balance Loan program streamlines the entire loan process for multifamily acquisition and refinancing loans ranging from $1 million to $7.5 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 DSCR
  • 1.20 in Top Markets
  • 1.25 in Standard Markets
  • 1.30 in Small Markets
  • 1.40 in Very Small Markets
  • Minimum 1.25x amortizing DCR for loans greater than $6 million
Maximum LTV
  • 80% in Top and Standard Markets
  • 75% if acquisition in Small/Very Small Markets
  • 70% if 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
Rate Structure Fixed and hybrid ARM loan terms available.
Eligible Properties 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 Property must generally be stabilized at 90% physical occupancy for the trailing 3-month average prior
to Underwriting or 85% for the trailing 3-month average prior to Underwriting under certain scenarios
Tax & 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.
Commercial Space Allowed up to 40% of total net rental income; no more than 40% of building’s square footage.
Recourse Non-recourse with standard carve-out provisions required.
Physical Risk Report (Form 1104) Appraisal and Zoning (Above $6M).
Prepayment Declining schedules and yield maintenance available for all loan types. 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 50, 80, 110, 140, and 170 Day Extended Delivery Options available
Freddie Mac Fee A non-refundable application fee (0.1% of loan amount in all markets except Top Markets) will be collected at time of rate lock.
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 (MA-NH); Washington, DC-Arlington-Alexandria (DC-VA-MD-WV); Chicago-Naperville-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-Stamford-Norwalk (CT); Miami-Fort Lauderdale-West Palm Beach (FL); Minneapolis-St. Paul-Bloomington (MN-WI); Portland-Vancouver-Hillsboro (OR-WA); and Seattle-Tacoma-Bellevue (WA)


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