Freddie Mac Multifamily announced a new Integrated Conventional Small lending product that brings loans of $2 million to $10 million into its core Conventional platform. The launch replaces the previous Small Balance Loan program after a two‑week transition period for existing borrowers.
The move consolidates underwriting and servicing by using the same documents, policies and teams that support larger Conventional loans, aiming to reduce operational volatility and improve pricing consistency for lenders and borrowers.
The new product expands Freddie Mac’s reach into the $47 billion of Small Balance Loans financed since 2015, covering more than 17,000 properties. It also maintains the Credit‑Risk Transfer framework that protects taxpayers and private investors.
Freddie Mac’s focus on affordable housing is underscored by the fact that over 90 % of the units it funds are priced for families earning up to 120 % of the area median income. The Integrated Conventional Small product is designed to support workforce and affordable housing projects that require loans in the $2 million to $10 million range.
Meg McElgunn, Vice President of Production and Sales for Freddie Mac Multifamily, said: "After more than ten years of experience, we've learned what works and how to best support this section of the market. Aligning small loans with our conventional platform allows us to capitalize on efficiencies with use of the same documents, same policies and same teams, while still having the small loan expertise applied from teams who have worked on small loans in the past." She added, "Through Conventional Small, we remain committed to serving smaller, workforce housing properties around the country."
The product will be available through Freddie Mac’s Optigo® lender network, giving approved sellers and servicers access to the streamlined conventional platform while preserving the specialized expertise that has driven the success of the Small Balance Loan program.
By integrating small‑balance loans into the conventional platform, Freddie Mac aims to lower transaction costs and accelerate loan approvals, which could translate into faster construction and occupancy of new workforce housing units. The move also reflects the company’s broader strategy to streamline operations and maintain a robust CRT framework while expanding its affordable housing footprint.
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