Non-Recourse Freddie Mac SBL 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.
Non-Recourse Loans in Relation to Freddie Mac’s Optigo Small Balance Program
If a loan is non-recourse and a borrower defaults, a lender cannot pursue a borrower’s personal assets in order to repay the outstanding balance of the loan. However, most non-recourse loans come with “bad-boy” carve-out provisions, which make the loan recourse if the borrower commits certain “bad acts,” such as embezzlement, fraud, or the intentional declaration of bankruptcy. Most, but not all Freddie Mac Multifamily loans are non-recourse. In regards to the Freddie Mac SBL program, the vast majority of loans are non-recourse with bad-boy carve-outs, though certain loans, especially interest-only loans in smaller markets, may carry some recourse.
Related Questions
What are the benefits of a non-recourse Freddie Mac SBL loan?
The benefits of a non-recourse Freddie Mac SBL loan include competitive pricing, less documentation, a streamlined underwriting process, and either hybrid ARM or fixed-rate loan products. Additionally, the program offers a simplified pricing process, a simplified SBL insurance assessment, less documentation, a reduction in due diligence requirements and easier third party reporting. Source
What are the requirements for a non-recourse Freddie Mac SBL loan?
The requirements for a non-recourse Freddie Mac SBL loan include collateral, undergoing a rigorous assessment, B-piece purchase, loss sharing, repurchasing of delinquent SBLs and origination of at least $50 million per quarter. Additionally, most non-recourse loans come with “bad-boy” carve-out provisions, which make the loan recourse if the borrower commits certain “bad acts,” such as embezzlement, fraud, or the intentional declaration of bankruptcy. Most, but not all Freddie Mac Multifamily loans are non-recourse. In regards to the Freddie Mac SBL program, the vast majority of loans are non-recourse with bad-boy carve-outs, though certain loans, especially interest-only loans in smaller markets, may carry some recourse.
What is the maximum loan amount for a non-recourse Freddie Mac SBL loan?
The maximum loan amount for a non-recourse Freddie Mac SBL loan is $7.5 million, according to this source.
What is the interest rate for a non-recourse Freddie Mac SBL loan?
The interest rate for a non-recourse Freddie Mac SBL loan depends on the market size and region. Right now (July 2019), interest rates for Freddie Mac Small Balance Loans range from 4.08% to 5.16%. We have broken down rates by region and market size below:
| Market Size | Region | Interest Rate |
|---|---|---|
| Top | Northeast | 4.08% |
| Top | Midwest | 4.08% |
| Top | South | 4.08% |
| Top | West | 4.08% |
| Standard | Northeast | 4.58% |
| Standard | Midwest | 4.58% |
| Standard | South | 4.58% |
| Standard | West | 4.58% |
| Small | Northeast | 4.83% |
| Small | Midwest | 4.83% |
| Small | South | 4.83% |
| Small | West | 4.83% |
| Very Small | Northeast | 5.16% |
| Very Small | Midwest | 5.16% |
| Very Small | South | 5.16% |
| Very Small | West | 5.16% |
In addition, pricing is further broken down by region, as Freddie Mac has divided the U.S. into 5 distinct regions for the purposes of SBL pricing. Interest-only periods can generally be added or subtracted for a 0.4% addition or subtraction per year. For instance, a borrower with a 5-year fixed-rate loan with a 5% interest rate could extend their I/O period to 2 years, but to do so, they would need to pay an elevated interest rate of 5.4%.
For more information, please visit https://apartment.loans/freddie-mac/.
What is the repayment term for a non-recourse Freddie Mac SBL loan?
The repayment term for a non-recourse Freddie Mac SBL loan is typically 5, 7, or 10 years. According to Apartment.Loans, most non-recourse loans come with “bad-boy” carve-out provisions, which make the loan recourse if the borrower commits certain “bad acts,” such as embezzlement, fraud, or the intentional declaration of bankruptcy. Additionally, according to Multifamily.Loans, the Freddie Mac SBL program offers loans that range from $1 million to $7.5 million with repayment terms of 5, 7, or 10 years.