Arizona small Balance multifamily market context
- Fannie Mae small loan cap
- Fannie Mae's published small-loan term sheet describes mortgage loans up to $9 million nationwide, on properties with five or more units. The 1.25x DSCR and 80 percent LTV on that sheet are program parameters, not a quote. Fannie Mae Small Mortgage Loan Program term sheet
- Freddie Mac SBL applications
- Freddie Mac's SBL Guide Addendum says new Small Balance Loan applications are no longer accepted as of April 30, 2026. The Conventional Small term sheet is the separate document for the replacement fixed-rate loan. Freddie Mac SBL Guide Addendum
A 20-unit courtyard in Mesa and a 200-unit community in Phoenix can both be apartments and still not be the same loan. The small-balance programs were built for the first kind of building: five or more units, a loan that is large for a local bank and small for a big institutional execution. Arizona multifamily is the parent page for every apartment program. This page is only the smaller agency box.
Fannie Mae's Multifamily Small Mortgage Loan term sheet, as published on its site, describes fixed- and variable-rate loans up to $9 million nationwide, for existing stabilized properties with five or more units, for acquisition or refinance. The same sheet lists a minimum DSCR of 1.25x and a maximum LTV of 80 percent. Those are Fannie Mae's published parameters, not a Capital Market Funds quote, and not a promise that a Phoenix or Tucson community at those figures will be approved. Non-recourse execution is described as available with standard carve-outs for bad acts. Assumptions are described as typical, subject to review of the new borrower.
Freddie Mac's path changed in 2026. Its SBL Guide Addendum states that Freddie Mac is no longer accepting Small Balance Loan mortgage applications as of April 30, 2026. An April 16, 2026 Multifamily Minute from Freddie Mac described the replacement: Conventional Small, for loans generally from $2 million to $10 million. The Conventional Small term sheet says the loans are generally in that range, on predominantly market-rate properties of 5 to 50 units, with 5-, 7-, 10-, 12-, or 15-year terms. The published grid on that sheet shows a minimum amortizing DCR of 1.25x. Again, that is Freddie Mac's sheet, not an offer from this office.
Who actually makes the loan
A Fannie Mae DUS lender makes a Fannie Mae loan. A Freddie Mac Optigo seller/servicer makes a Freddie Mac loan. Capital Market Funds is neither. Craig Hoebing arranges the introduction and the file from Scottsdale under Arizona commercial mortgage banker license CMB-1047342, NMLS 1445066. If the executing lender will not take the asset, we look at a bank, a life company, or another source. We do not relabel a declined agency file as approved.
Older Freddie Mac Small Balance Loans that already closed are still serviced. The addendum is about servicing those loans and about the end of new SBL applications. A sponsor with an existing SBL who wants a supplemental or an assumption is talking to that servicer, not starting a new SBL application through us. A new smaller apartment loan is a Conventional Small conversation, or Fannie Mae's small loan, or something else entirely.
What to send before anyone talks proceeds
Unit count, a current rent roll, a trailing twelve months of income and expenses, and whether the request is a purchase or a refinance of a loan that is coming due. Five units is the floor these agency sheets use. A rental house, a duplex, a triplex, or a fourplex is outside them, and outside this page. Say the city. A Tucson garden community and a Scottsdale infill building do not share a rent roll just because both are in Arizona.
Published program minimums are not the only test. The lender still reads collections, taxes, insurance, reserves, and the sponsor. A property can print 1.25x on a spreadsheet and fail the file. Test a ratio you choose on the DSCR calculator. It will not look up Fannie Mae's or Freddie Mac's grid for you.
Who can hold a smaller Arizona apartment loan
| Source | When it fits |
|---|---|
| Fannie Mae | The small-loan term sheet, up to $9 million and five or more units, placed with a DUS lender. We are not that lender. |
| Freddie Mac | Conventional Small for a new smaller apartment loan after SBL applications stopped. Placed with an Optigo lender. |
| Bank | When the community is outside the agency box, or the sponsor wants a portfolio hold instead. |
| HUD / FHA | 223(f) for an existing apartment that fits HUD better than a small agency loan. Originated with a HUD-approved lender. |