Small multifamily properties — with five to 50 units — represent nearly a third of the multifamily rental market, and much of this housing stock is affordable to low- and very low-income renters. Financing options for this segment have traditionally been more limited than conventional offerings, with fewer lenders and loan flexibility options for borrowers.

In October 2014, we announced the addition of the Small Balance Loan (SBL) line of business to our lending platform. This program targets loans between $1 million and $7.5 million and offers prepay flexibility to borrowers. Through June 2024, we've funded and securitized over 15,500 loans totaling over $42 billion.

The SBL Prepayment Report leverages our own data and focuses on the voluntary prepayment activity of our SB-Deals® over the past 12 months (from July 2023 through June 2024). Based on historical performance to date, we find that prepayment speeds increase with loan seasoning and declining prepayment premiums, all else equal. As loans season and a growing population of loans move into periods with lower prepayment premiums, we expect prepayment activity to pick up. However, higher interest rates and falling property values are slowing prepayment activity, which may continue going forward.

Read the report.

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