Appraisals for Freddie Mac Small Balance Loans
Program update, July 2026
What changed. Freddie Mac retired the Small Balance Loan program on April 15, 2026 and folded small-balance lending into its conventional platform. New loans are originated as Conventional Small: $2 million to $10 million, up to 80% LTV, 1.25x minimum debt coverage, properties of 50 units or fewer. The practical effect is that Freddie no longer has a small-balance product below $2 million. The guidance on this page describes SBL as it operated before that change, and remains useful for understanding loans already in place.
What you can still do. Small-balance agency financing did not go away. Fannie Mae's Small Mortgage Loan program is still open, lends up to $9 million on five or more units, and is often the better execution on smaller deals. Below the agency minimums, or where the property or the timeline does not fit an agency box, the desk also places bank, CMBS, bridge, life company, and HUD/FHA debt. See Freddie Mac apartment loans for current agency terms, or tell us about the deal and we will size it across every execution that fits.
Appraisals in Relation to the Freddie Mac SBL Program
An appraisal attempts to gauge the current market value of a property. Appraisals for the Freddie Mac Small Balance Loan program must be extremely thorough, not only breaking down the exact estimated cost of a property, but why an appraiser believes the information is accurate-- and why they believe their methods/analysis is accurate. Freddie Mac Multifamily appraisals, including appraisals for the SBL program, must be conducted by appraisers who are currently licensed in the state where the subject property is located.
Related Questions
What is the process for obtaining an appraisal for a Freddie Mac Small Balance Loan?
The process for obtaining an appraisal for a Freddie Mac Small Balance Loan includes having an appraiser who is licensed in the state where the subject property is located. According to Apartment.loans, the appraisal must be extremely thorough, breaking down the exact estimated cost of a property and why the appraiser believes the information is accurate. Additionally, according to Multifamily.loans, the loan requires third-party reports, including an Appraisal, Phase I Environmental Assessment, and Engineering Report. Finally, according to Apartment.loans, the quality and condition of the asset are important to the small balance loan program, and in most cases, Freddie Mac will send one of their regional managers to perform a site inspection of the subject property.
What are the requirements for appraisals for Freddie Mac Small Balance Loans?
Appraisals for the Freddie Mac Small Balance Loan program must be extremely thorough, not only breaking down the exact estimated cost of a property, but why an appraiser believes the information is accurate-- and why they believe their methods/analysis is accurate. Freddie Mac Multifamily appraisals, including appraisals for the SBL program, must be conducted by appraisers who are currently licensed in the state where the subject property is located.
What are the benefits of obtaining an appraisal for a Freddie Mac Small Balance Loan?
The benefits of obtaining an appraisal for a Freddie Mac Small Balance Loan include:
- Gauging the current market value of a property
- Breaking down the exact estimated cost of a property
- Explaining why an appraiser believes the information is accurate
- Explaining why they believe their methods/analysis is accurate
- Must be conducted by appraisers who are currently licensed in the state where the subject property is located
The Freddie Mac Small Balance Loan program also offers a variety of other benefits, such as:
- Up to 80% LTV allowance
- Streamlined application process
- Loans are non-recourse
- Interest-only options
- 30-year amortizations
- Variety of hybrid ARM and fixed-rate options available
- Loans are assumable with approval and 1% fee
- 60-120 day rate locks typically available
What are the risks associated with appraisals for Freddie Mac Small Balance Loans?
The risks associated with appraisals for Freddie Mac Small Balance Loans include the need for third-party reports, such as an Appraisal, Phase I Environmental Assessment, and Engineering Report. Additionally, replacement reserves of between $200 and $300 per unit are typically required, as well as a $7,000 application fee and a Freddie Mac processing fee of 0.1% of the loan amount. Subordinate debt is not permitted.
What are the costs associated with appraisals for Freddie Mac Small Balance Loans?
The costs associated with appraisals for Freddie Mac Small Balance Loans include a $7,000 application fee and a Freddie Mac processing fee of 0.1% of the loan amount. Additionally, an appraisal must be conducted by an appraiser who is currently licensed in the state where the subject property is located.
Sources:www.multifamily.loans/freddie-mac-small-balance-apartment-loans apartment.loans/posts/appraisals apartment.loans/posts/freddie-mac-small-balance-loans-under-1-million-what-you-need-to-know