By Igor Zhizhin
American Street Capital LLC
Since the Great Recession ended in 2009, no other market players have had a
greater impact on the multifamily lending industry than Fannie Mae and Freddie
Mac. As of this past May, Fannie and Freddie held or guaranteed 44 percent of
all outstanding multifamily mortgages, up from 25 percent in 2006. The two
government-sponsored enterprises, or GSEs, also play a vital role in the purchase
or guaranteeing of small-balance multifamily commercial mortgages — loans
valued between $750,000 and $7.5 million.
Although they target borrowers and property types with similar profiles, Fannie
Mae’s and Freddie Mac’s programs are fundamentally different. It is imperative for
a successful commercial mortgage broker to understand these differences, so they
can provide value to their multifamily clients by offering uniquely customized
solutions, particularly in the small-balance market.
Understanding the options for small-balance
multifamily loans can pay dividends