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Small Balance Loan

Arbor’s Freddie Mac Small Balance Loan program streamlines the entire loan process for multifamily acquisition and refinancing loans ranging from $1 million to $6 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 DSC 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% 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 Property 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 and 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.
Recourse Non-recourse with standard carve-out provisions required.
Commercial Space Allowed up to 40% of total net rental income; no more than 40% of building’s square footage.
Appraisal, Physical Risk Report Appraisal, Properly Condition Assessment, Phase I Environmental, Zoning (on loans above $6M), Insect and Flood
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 A non-refundable application fee (0.1% of loan amount in all markets except Top Markets) will be collected at time of rate lock. 60, 90, 120, 150, 180 day extended delivery Options available.
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 (MANH), Washington, DC-Arlington-Alexandria (DC-VA-MD-WV), ChicagoNaperville-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-StamfordNorwalk (CT), Miami-Fort Lauderdale-West Palm Beach (FL), Minneapolis-St. Paul-Bloomington (MN-WI), Portland-Vancouver-Hillsboro (OR-WA), and SeattleTacoma-Bellevue (WA)


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