Freddie Mac discontinued its Small Balance Loan Program, replacing it with a product that only funds $2 million to $10 million loans. The old program financed over 17,000 loans worth $47 billion since 2015. Owners needing sub-$2 million financing now need to look to Fannie Mae, community banks, or local portfolio lenders.
So if your building needs a loan under $2 million, Freddie no longer has a product size for you. Now, here is the development that got very little attention and matters directly to owners in the 5 to 50 unit range. In April, Freddie Mac retired its Small Balance Loan Program and folded small balance lending into its conventional platform under a product called Conventional Small. Freddie says it is not stepping away from small loans, only consolidating them, and intends to stay active in the space. That program was significant. Since 2015, it financed more than 17,000 loans totaling over $47 billion. The new product runs from $2 million to $10 million on properties of 50 units or fewer. And there is the practical catch. The old small balance program started at $1 million. The new one starts at $2 million. So if your building needs a loan under $2 million, Freddie no longer has a product size for you. One of your 2 agency doors moved. But know that the change happened because a lot of owners have not heard about it. Small balance agency financing did not disappear. Fannie Mae's small loan program is still open, still lends on 5 or more units. And is often the better execution on smaller deals anyway. Below the agency minimums, you still have community banks, credit unions, and local portfolio lenders, which for many small building owners were always the more practical option. And there is real capacity behind all of it. The Federal Housing Finance Agency raised the 2026 purchase caps for Fannie and Freddie to $88 billion each, about $176 billion combined. That is up roughly 20% from last year. The money is there. So if capital is available and caps are up, what is actually standing between you and the loan you want?
