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October 11, 2021

SBL Prepayment Report, as of July 2021

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. Since the program’s inception, we’ve securitized over $32 billion on nearly 12,500 of these loans.

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 August 2020 through July 2021). We find that prepay speeds increase due to loan seasoning and declining prepayment penalties. As loans season and a growing population of loans move into periods with lower prepayment penalties, we expect prepayment activity to pick up.

Read the report.

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