Who are the Top Lenders for the Freddie Mac SBL Program?
Start Your Application and Unlock the Power of Choice$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!The Top Freddie Mac Small Balance Lenders of 2019
Currently, there are 11 Freddie Mac Optigo lenders authorized to offer loans through the Opigo Small Balance Loan program. While some of the largest Freddie Mac lenders, like CBRE and Capital One can provide Small Balance Loans, many of the largest agency lenders do not offer the program.
All Freddie Mac SBL lenders are part of Freddie Mac’s new Optigo seller/servicer network, which is intended to offer streamlined service and greater certainty of execution-- even for more challenging loans in smaller markets. Freddie Mac Optigo SBL Lenders include:
- Arbor Agency Lending LLC: Based in Uniondale, NY, Arbor has been operating as a commercial and multifamily lender for almost 25 years. In 2018, Arbor was named one of the top 4 Freddie Mac SBL lenders. Plus, Arbor lends well over $1 billion per year, and, as of 2018, serviced a loan portfolio of over $16 billion. In addition to being an approved SBL lender, the company is also authorized to offer Fannie Mae and HUD/FHA multifamily financing.
- Basis Investment Group, LLC: Based in New York, NY, Basis Investment Group has provided $2.5 billion in commercial real estate debt and structured equity financing since 2009. In addition to offering financing through the Freddie Mac SBL program, Basis also specializes in CMBS, bridge financing, and preferred equity/mezzanine investments.
- Capital One N.A.: Capital One, based in McLean, Virginia is a well-known consumer bank, and is currently listed as the 10th largest bank in the U.S. by total assets. As of December 2018, the bank had $70.333 billion of outstanding loans backed by commercial and multifamily properties. In addition to offering Freddie Mac Multifamily loans, Capital One also provides a significant amount of Fannie Mae Multifamily financing.
- CBRE Capital Markets Inc.: The CBRE Group, based in Los Angeles, is the world’s largest commercial real estate investment services firm. In 2018, they arranged more than $50 billion of financing, and had revenues of over $20 billion. Perhaps more importantly, they were named by Freddie Mac Multifamily as the number one lender by volume in 2018, arranging $13.69 billion of financing.
- CPC Mortgage Company LLC: Technically, CPC Mortgage is the newest lender on this list, though its roots go back several decades. CPC Mortgage was founded in 2019 by the Community Preservation Corporation (CPC), a non-profit that’s dedicated itself to expanding the supply of affordable housing in the United States. Since the CPC was founded in 1974, it has focused specifically on small buildings and community revitalization. It become a Freddie Mac lender in 1994, and was approved to issue Small Balance Loans in 2015.
- Greystone Servicing Company: Over the last 30 years, Greystone has arranged and advised on hundreds of billions of dollars in multifamily and commercial debt. Greystone was listed as a top 10 Freddie Mac lender in 2018, providing $2.61 billion in loans. In addition to being a top Freddie Mac lender, Greystone is also a major Fannie Mae lender, and was ranked the #1 HUD/FHA multifamily lender of 2018, with $1.82 billion in loan volume.
- Hunt Real Estate: Since being founded 47 years ago, Hunt Real Estate has provided a variety of commercial and multifamily lending options. Today, the company services a loan portfolio of $15.8 billion. Currently, the company has a $2.6 billion portfolio of small balance loans, including Fannie Mae, Freddie Mac, and proprietary loans.
- ORIX Real Estate Capital LLC, formerly Red Mortgage Capital LLC: Since 1990, Red Capital Group has issued over $75 billion debt and equity to clients, and currently has a servicing portfolio of approximately $16 billion. In addition to being a Freddie Mac SBL lender, Red Capital is also a Fannie Mae DUS lender and a HUD/FHA multifamily lender.
- Pinnacle Financial Partners: Based in Nashville, Tennessee, Pinnacle Financial Partners, which was founded in 2000, is a bank offering a variety of commercial financing solutions. Pinnacle became a Freddie Mac SBL lender in 2015, and was projected to provide an estimated $300 million in SBL financing in 2018.
- Sabal TL1 LLC: While it doesn’t reach the list of the top 10 largest Freddie Mac lenders, Sabal Capital Partners is one of the most active Freddie Mac SBL lenders on this list. The company funded approximately $1 billion of loans in 2018, including portfolio loan of $189 million.
What is the Freddie Mac SBL Program?
The Freddie Mac Small Balance Loan (SBL) Program is a loan program offered by Freddie Mac to assist small business owners in securing liquidity for their investments. The program ensures approved sellers and servicers have a platform dedicated to selling loans for smaller rental properties. Qualifying projects include multifamily properties with loans that range from $1 million to $7.5 million. Some of the key benefits and features of the program are competitive pricing, less documentation, a streamlined underwriting process, and either hybrid ARM or fixed-rate loan products.
In addition to the property requirement, servicers and sellers must also meet a specific set of guidelines. These include collateral, undergoing a rigorous assessment, B-piece purchase, loss sharing, repurchasing of delinquent SBLs and origination of at least $50 million per quarter.
What are the eligibility requirements for the Freddie Mac SBL Program?
The eligibility requirements for the Freddie Mac SBL Program include:
- Property requirements
- Servicer & Seller Requirements
- Collateral
- Rigorous assessment
- B-piece purchase
- Loss sharing
- Repurchasing of delinquent SBLs
- Origination of at least $50 million per quarter
For more information, please refer to the Freddie Mac SBL Program Guidelines.
What are the advantages of the Freddie Mac SBL Program?
The advantages of the Freddie Mac SBL Program include:
- Flexible loan sizes, starting at just $750,000 and going up to $7.5 million
- Low interest rates, starting from just 4.51%
- High leverage, up to 80% LTV
- Generous DSCR minimums, as low as 1.20x
- 30-year amortizations, keeping payments low for borrowers
- Partial and full-term interest-only loans offered
- Cash-out refinancing offered for eligible borrowers
- Multiple fixed rate term options (with up to 10-year terms) and hybrid ARM options (with 20-year terms)
- Soft step-down prepayment penalties allowed
- 60-120 day rate commitments offered
- Loans are fully assumable with 1% fee and Freddie Mac approval
- Financing is non-recourse (with individual exceptions for certain loans)
What are the loan terms for the Freddie Mac SBL Program?
The Freddie Mac Small Balance Loan (SBL) program offers apartment financing in amounts between $1 million and $7.5 million. It offers LTVs up to 80% and DSCRs as low as 1.25x. Loan terms include a 20-year hybrid adjustable-rate loan with a 5, 7, or 10-year initial fixed-rate period, or a 5-, 7-, or 10-year fixed-rate loan (partial and full-term interest-only loan options are also available). Amortization is up to 30 years. Borrowers usually need a net worth of at least 100% of the loan amount and liquidity equal to 10% of the loan amount (adjustable based on various factors). Closing generally occurs 45 to 60 days after application.
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What are the fees associated with the Freddie Mac SBL Program?
The Freddie Mac SBL Program requires an application fee of $4,500 for Top Markets and $8,500 for Standard Markets. Additionally, a Freddie Mac Multifamily Appraisal, a Property Condition Report, and a Phase I Environmental Assessment are required.
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