What is the Required DSCR 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.
DSCR Requirements for Freddie Mac Small Balance Loans
DSCR, or debt service coverage ratio, is one of the most important metrics that lenders use to determine a borrower’s eligibility for multifamily and commercial financing. Minimum DSCR requirements for the Freddie Mac Optigo Small Balance Loan program start at just 1.20x, but can go up to 1.50x for certain borrowers. In general, DSCR requirements are larger for smaller markets, as well as for property refinances. The specific DSCR requirements for Small Balance Loans are detailed below:
- Top Markets: 1.20x DSCR for hybrid ARM and fixed-rate loans, 1.35x DSCR for full-term interest-only financing
- Standard Markets: 1.25x DSCR for hybrid ARM and fixed-rate loans, 1.40x DSCR for full-term interest-only financing
- Small Markets: 1.30x DSCR for hybrid ARM and fixed-rate loans, 1.40x for full-term interest-only financing
- Very Small Markets: 1.40x DSCR for hybrid ARM and fixed-rate loans, 1.50x for full-term interest-only financing
DSCR Calculator
Related Questions
What is the maximum loan amount for the Freddie Mac SBL Program?
The maximum loan amount for the Freddie Mac SBL Program is $7.5 million. Additional requirements apply for loans between $6 million and $7.5 million, including that they must be in Top & Standard Markets, have no more than 100 units, and require a minimum DSCR of 1.25x. Source
What is the minimum DSCR requirement for the Freddie Mac SBL Program?
The minimum DSCR requirement for the Freddie Mac SBL Program is 1.20x for hybrid ARM and fixed-rate loans in top markets, and 1.50x for full-term interest-only financing in very small markets.
For more information, please see the following sources:
- DSCR Requirements for Freddie Mac Small Balance Loans
- Freddie Mac Optigo Small Balance Loan
- Small Balance Loans
- DSCR for Freddie Mac Small Balance Loans
- Smaller Markets
What is the maximum loan-to-value ratio for the Freddie Mac SBL Program?
The maximum loan-to-value ratio for the Freddie Mac SBL Program is 80% for purchases and refinances in Top and Standard Markets. For Small or 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 or Very Small Markets.
What is the minimum debt service coverage ratio for the Freddie Mac SBL Program?
The minimum debt service coverage ratio (DSCR) for the Freddie Mac Small Balance Loan (SBL) Program starts at 1.20x for hybrid ARM and fixed-rate loans in top markets, and can go up to 1.50x for full-term interest-only financing in very small markets.
In top markets, the DSCR requirement is 1.20x for hybrid ARM and fixed-rate loans, and 1.35x for full-term interest-only financing. In standard markets, the DSCR requirement is 1.25x for hybrid ARM and fixed-rate loans, and 1.40x for full-term interest-only financing. In small markets, the DSCR requirement is 1.30x for hybrid ARM and fixed-rate loans, and 1.40x for full-term interest-only financing. In very small markets, the DSCR requirement is 1.40x for hybrid ARM and fixed-rate loans, and 1.50x for full-term interest-only financing.
Sources: https://apartment.loans/posts/dscr/, https://apartment.loans/posts/what-is-the-required-dscr-for-the-freddie-mac-sbl-program/, https://www.freddiemac.com/multifamily/product/pdf/small_balance_loan.pdf
What is the maximum debt service coverage ratio for the Freddie Mac SBL Program?
The maximum debt service coverage ratio for the Freddie Mac SBL Program depends on the market size and loan type. For amortizing loans in Top Markets, the maximum DSCR is 1.20x. For full-term interest-only loans in Smaller Markets, the maximum DSCR is 1.50x. For more information, please see the following sources: