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.
Lending Activity Accelerates as Loan Maturities Reshape Cap Rates
Arbor Realty Trust’s Small Multifamily Investment Trends Report Q1 2026, developed in partnership with Chandan Economics, shows that lending activity in the sector increased for the second consecutive year amid a sharp increase in refinancings. Even with persistently high interest rates and rigorous underwriting standards, small multifamily entered the first quarter on steady footing.
Key Findings
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Small multifamily originations accelerated in the second half of 2025, rising more than 16% year-over-year, the second consecutive year of increase.
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Cap rates edged higher, driven primarily by refinancing activity.
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LTVs rebounded as credit underwriting conditions continued to normalize.