What are the Occupancy Requirements for the Freddie Mac SBL Program?
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.
Freddie Mac Small Balance Loan
Like most other types of multifamily financing, Freddie Mac Small Balance Loans have minimum occupancy requirements that must be met in order for a borrower to be approved. For most properties, this is set at 90% physical occupancy for 90 days before the loan is underwritten.
However, 85% physical occupancy is allowed under certain circumstances, including:
- The property has less than 30 units
- The property is located in a Top Market, and is either a new property or has been renovated recently
- For acquisitions, the property must:
- Have a general history of stable occupancy
- Be relatively crime free (on a historical basis)
- Have appraised rents/occupancy higher than current rents/occupancy (i.e. room to improve profitability)
- Have an owner/property manager acquiring/managing the property with more experience than the current owner/management
Related Questions
What is the minimum occupancy rate for Freddie Mac SBL loans?
For most properties, the minimum occupancy rate for Freddie Mac SBL loans is set at 90% physical occupancy for 90 days before the loan is underwritten. However, 85% physical occupancy is allowed under certain circumstances, including:
- The property has less than 30 units
- The property is located in a Top Market, and is either a new property or has been renovated recently
- For acquisitions, the property must:
- Have a general history of stable occupancy
- Be relatively crime free (on a historical basis)
- Have appraised rents/occupancy higher than current rents/occupancy (i.e. room to improve profitability)
- Have an owner/property manager acquiring/managing the property with more experience than the current owner/management
What are the occupancy requirements for Freddie Mac SBL loans?
For most properties, Freddie Mac Small Balance Loans have a minimum occupancy requirement of 90% physical occupancy for 90 days before the loan is underwritten. However, 85% physical occupancy is allowed under certain circumstances, including:
- The property has less than 30 units
- The property is located in a Top Market, and is either a new property or has been renovated recently
- For acquisitions, the property must:
- Have a general history of stable occupancy
- Be relatively crime free (on a historical basis)
- Have appraised rents/occupancy higher than current rents/occupancy (i.e. room to improve profitability)
- Have an owner/property manager acquiring/managing the property with more experience than the current owner/management
In addition, all buildings must be managed by the same property manager and no unit within the property may be occupied by the owner.
What is the maximum loan-to-value ratio for Freddie Mac SBL loans?
The maximum loan-to-value ratio for Freddie Mac SBL loans is 80% for purchases and refinances in Top and Standard Markets. For Small and Very Small Markets, the maximum loan-to-value ratio is 75% for purchases and 70% for refinances. For full-term interest-only financing, the maximum loan-to-value ratio is 65% for Standard Markets and 60% for Small and Very Small Markets.
Source: apartment.loans/posts/what-is-the-required-ltv-ratio-for-the-freddie-mac-sbl-program
What is the maximum loan amount for Freddie Mac SBL loans?
The maximum loan amount for Freddie Mac SBL loans is $7.5 million. Source
What is the minimum loan amount for Freddie Mac SBL loans?
The minimum loan amount for a Freddie Mac SBL Link Loan is $2 million, regardless of the number of units.
Freddie Mac Small Balance Loans Under $1 Million: What You Need to Know
- Loans must be in a Top Market or Standard Market
- Eligible borrowers include:
- Previous Freddie Mac Multifamily borrowers
- Borrowers taking out multiple loans simultaneously
- Borrowers who will are likely to engage Freddie Mac for 2+ additional loans within the next 12 months
- Borrowers with significant multifamily experience in the area (2+ years local multifamily experience and 2+ multifamily properties owned)
- Loans that were initially approved for $1 million+ but were later constrained by property NOI or other factors
- Properties must underwrite a vacancy of at least 5% and an expense ratio of at least 30%
- 10-15 bps will be added loans in Top Markets, while 15-20 bps will be added to loans in Standard Markets
- Cash-out refinances for these loans are typically subject to stricter leverage requirements (LTV/DSCR)
- Seller/servicers may not market Small Balance Loans less than $1 million
- Freddie Mac generally requires 3 additional business days for commitments and inspections
Freddie Mac Small Balance Loans Between $6 Million to $7.5 Million: What You Need to Know
- SBL loans above $6 million are generally only permitted in Top & Standard Markets
- Plus, they can have no more than 100 units, and will require a borrower to order additional third-party reports, including a survey report and a zoning report
- Finally, loans of more than $6 million also require a minimum DSCR of 1.25x, and require that borrowers form a Single Asset Entity (SAE)