Small multifamily lending activity rose during the first half of 2026. According to the latest Small Multifamily Investment Trends Report from Arbor Realty Trust and Chandan Economics, originations on loans with original balances between $1 million and $9 million reached an annualized pace of $71.6 billion through the second quarter. At this pace, originations are running 2.8% above the $69.6 billion total for 2025, placing small multifamily on pace for a third consecutive annual increase.
New Opportunities Emerge as Old Challenges Linger
As the cost of living in the U.S. climbs, the shortage of affordable housing is a persistent challenge for many communities. While progress has been uneven to date, Arbor Realty Trust and Chandan Economics document federal and state initiatives aimed at creating positive change. In a sector known for its strength, stability, and consistency, new and old affordable housing opportunities are converging as the nation accelerates construction.
Key Findings:
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11 million renter households face affordability challenges as severe underbuilding in many West Coast, Northeast, and Great Lakes metros restricts supply.
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The One Big Beautiful Bill Act expands Low-Income Housing Tax Credits (LIHTC) and Opportunity Zones, aiming to accelerate affordable housing construction.
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State-level reforms employ supply-side housing policies to spur development.