Small Balance Loans Drive Multifamily Deals

Small Balance financing remains vital for multifamily deals. Discover how Small Balance Loans shape the garden style market in key metros.

March 17, 2026

Valerija I.

Freddie Mac Small Balance Loans (SBL) serve assets under $7.5M, with an average loan size of $2.59M.
SBLs represent 32.6% of Freddie Mac-securitized properties but only 5.5% of the balance.
Major metros like New York, LA, and Chicago see SBLs finance over half of garden style securitized assets.
The program is the top securitized source for garden style multifamily in several key markets.

Key Takeaways

Program Overview

Freddie Mac’s Small Balance Loans program supports acquisitions and refinancing for smaller multifamily properties nationwide, according to Trepp. The program currently includes 9,162 properties with $23.7B in outstanding loans.

As a result, Small Balance Loans provide a major capital channel for workforce housing and smaller multifamily assets. These properties often receive less attention from larger securitization structures. In turn, the program delivers liquidity to assets typically valued below $7.5M. This approach expands access to agency financing for smaller owners and investors. It also opens financing options beyond Freddie Mac’s flagship K Series deals.

Table showing Freddie Mac securitized balance by category, including K-Series, Small Balance Loans, and other programs by property count and allocated balance.

Regional Impact by Metro

Small Balance Loans have varying significance across US metros, depending on local asset composition and demand. In the New York–Newark–Jersey City MSA, SBLs account for $4.77B—primarily in garden style and some mid/high-rise segments. Los Angeles follows with $2.09B, overwhelmingly in garden style stock. Significant penetration is also seen in Chicago ($1.48B), Seattle ($966.6M), and Dallas–Fort Worth ($785.3M), with garden style properties consistently dominating SBL activity.

Where Small Balance Matters Most

Small Balance Loans are the leading securitized financing source for garden style assets in several major metros. SBLs fund 57.77% of all securitized garden/low rise assets in New York’s metro, 56.2% in Seattle, and 55.14% in Chicago. Penetration in Los Angeles is 41.01%, while Dallas–Fort Worth sees 23.84%, shaped by a broader securitization mix. At the same time, new multifamily projects continue to move forward in high-demand markets like South Florida, where developers recently broke ground on another luxury apartment community in Palm Beach. Across these markets, more than half of SBL assets tend to be garden style, underscoring the program’s market niche and sustained importance.

Bar chart showing the share of securitized garden and low-rise multifamily properties financed by Freddie Mac Small Balance Loans across major US metros.

What’s Next

As the demand for smaller workforce and garden style multifamily persists, Small Balance financing is likely to remain a foundational tool in Freddie Mac’s strategy—particularly in metros where small assets and distributed ownership dominate the landscape. Program refinements will be closely watched for how they guide future multifamily lending and market liquidity.