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Fannie Mae Multifamily Small Loan Program

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Best Program For You
Which Program is Best
Which one of our apartment loan programs is best for you? By providing some basic information about yourself, your property and what you are looking for in an apartment loan, we can help you decide which one of our programs is best for you.
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Crefcoa has the knowledge, expertise and strategic relationships required to provide you with the most competitive rates and terms for your commercial or multifamily property.
  • Multiple program options
  • Competitive rates and terms
  • Knowledge and expertise
  • Certainty of execution
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Fannie Mae Small Apartment Loans Program Overview

The Fannie Mae Small Loan Multifamily program is designed for low cost execution, competitive pricing, reduced documentation, and limited third party reports. The Small Loan program offers borrowers unmatched performance and value, flexible terms and streamlined processing for apartment loan sizes up to $5 million.
  • Loan size $750,000 - $5,000,000
  • Nationwide availability
  • Hedge interest rate risk with fixed rate terms
    up to 30 years
  • Non-recourse
  • Up to 80% LTV
  • Loans are assumable
  • Finance up to 3% of closing costs
  • 90% minimum occupancy required
  • Tax returns not required

Fannie Mae Multifamily Small Loan Program Guidelines

Eligible Properties Eligible property types include, 5+ unit traditional apartment complexes, condo properties without fractured ownership, town homes, and duplexes. Mixed-use properties with up to 25% commercial rentable space with no greater than 25% of effective gross. Scattered site properties subject to Fannie Mae review.
Eligible Locations Nationwide.
Loan Size $750,000 - $6,000,000.
Term Fixed rate terms up to 30 years. Floating rate programs available. Can customize both fixed rate term and amortization period (e.g. 12/25, 18/18, 20/20, 10/15, 25/25) to meet sponsor's investment goals and objectives.
Amortization 30-year.
Minimum DSCR 1.25.
Maximum LTV 80% for purchase and rate and term refinance. 80% for cash out refinances if property is located in a major market. 75% for cash out refinances for properties located in smaller markets and 5-year fixed rate term. 5-yr fixed rate option is capped at 75% LTV.
Minimum Occupancy 90% physical / 85% economic for 90 days prior to closing.
Interest Only Available up to 10-years.
Interest Accrual Actual/360 or 30/360.
Prepayment Penalty Flexible prepayment options available including yield maintenance and declining prepayment premium.
Guarantee Non-recourse subject to standard carve-outs.
Assumable Yes, subject to lender approval.
Supplemental Loan Available 12 months from date of closing of first loan.
Impounds Tax and insurance required on higher leveraged loans.
Replacement Reserves Required for loans with LTV > 65% and/or DSCR < 1.35. Waived for loans with LTV > 65% and DSCR > 1.35.
Subordinate Debt Not permitted.
Rate Lock At commitment. 30- to 180-day commitments. Borrowers may lock a rate with the Streamlined Rate Lock option.
Borrower Single asset single purpose entity.


Borrowers may have indirect foreign ownership interests, subject to proper structuring of the borrowing entity and its parent.

Sponsor Requirements
  • 680 minimum credit score
  • Collective net worth of key principals must exceed loan amount
  • Minimum liquidity of nine months debt service
  • Local ownership no prior multifamily experience required
  • Absentee ownership requires two years comparable multifamily ownership experience
Pre-Review Markets Michigan, Indiana, Ohio (excluding Columbus) Las Vegas, Tulsa, Atlanta, Houston, Odessa, Midland, San Bernardino, Riverside, Kennewick, Oklahoma City, Atlanta, Puerto Rico, U.S. Virgin Islands, Guam, Fayetteville, Wyoming, New Orleans, Wichita Falls.
Tenant Concentration Properties with a specific tenant (e.g. student, military, corporate) concentration greater than 25% are ineligible for financing under the Small Loan program. Properties with a project based HAP contract are ineligible under the Small Loan Program, but can be processed through the Affordable Housing program or Freddie Mac Targeted Affordable Express program.
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What You Need to Know

Program descriptions, highlights and underwriting guidelines are helpful when considering if an apartment loan program is right for you and your property. However, they don't always tell the whole story. Below is what you need to know about the Fannie Mae Small Apartment loan program that program guidelines and highlights don't tell you.
  • Fannie Mae has specific financial capacity requirements for its Small Loan program (net worth and liquidity) and there is no gray area -- you either meet them or you don't.
  • Fannie requires a minimum expense for specific expense line items, e.g. maintenance and repairs, management, payroll, general and administrative and replacement reserves.
  • Asset quality and condition are important. A property condition inspection is required and any life, health and safety related deficiencies must be cured prior to closing. GFCI outlets must be installed in all kitchens and baths.
  • Properties with tuck under or subterranean parking that are located in Seismic zones 3 and 4 require a PML report. Properties built prior to 1980 that have not had a seismic reinforcement or retrofit completed are generally ineligible. Properties with unreinforced masonry construction are ineligible.
  • Absentee ownership requires professional third party management.
  • While Fannie Mae apartment loans are non-recourse, all key principals must sign an exceptions to non-recourse document and each have joint and several liability.
  • Non-contiguous properties require a Fannie Mae waiver (which is difficult to obtain).
  • Phased properties require a Fannie Mae waiver (which is difficult to obtain).
  • Properties that are a part of a PUD and/or belong to an HOA are generally ineligible.
  • Various lien, litigation and bankruptcy searches are required for Borrowing Entities and Key Principals.
  • Insurance for secondary market programs (Fannie, Freddie, HUD CMBS) typically requires more coverage than traditional banks require; therefore, resulting in a higher insurance expense.
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