A Walker & Dunlop perspective: Understanding the changes to Freddie Mac’s Small Balance program

Freddie Mac's update to its small balance lending program brings process changes and a higher loan ceiling, giving borrowers more options depending on loan size, pricing, and execution needs.

Several weeks into Freddie Mac’s rollout of Optigo® Conventional Small, the update is beginning to take shape less as a wholesale repositioning of the small balance market and more as a targeted refinement of Freddie Mac’s execution. From Walker & Dunlop’s perspective, the program creates a broader and more integrated Freddie Mac option for eligible borrowers, while reinforcing the importance of comparing each transaction against the full range of available agency executions.

Freddie Mac's April 15 launch of Optigo® Conventional Small replaces the former Small Balance Loan (“SBL”) program and moves the product into Freddie Mac's core Conventional framework. The program is designed for loans from $2M to $10M and consolidates certain documents and policies across the small- and mid-balance book.

The ceiling increase broadens the eligible Freddie Mac small-loan range

Small balance deal sizes have generally moved higher over the past decade, a reflection of higher property values, rent growth, and larger property profiles in many secondary and tertiary markets. Against that backdrop, the move from a $7.5M ceiling to a $10M ceiling enhances Freddie Mac’s ability to deliver liquidity to the small balance multifamily market.

The $2M floor creates a clearer distinction from Fannie Mae Small Loans

The comparison between Freddie Mac's Conventional Small product and the Fannie Mae Small Loan program should be precise. From a process standpoint, Freddie Mac's updated platform may feel more conventional-like because it sits inside the core Conventional framework. From a product standpoint, however, the programs are not interchangeable.

Fannie Mae Small Loans can serve smaller loan requests, including loans as low as $1M, while Freddie Mac's Conventional Small product has a $2M floor. For Walker & Dunlop, the value is in helping borrowers compare both agency platforms based on the specifics of the deal, not in treating them as equivalent executions.

The integration may simplify execution, but pricing will determine fit

Running SBL as a separate platform made sense when the program launched in 2014. Moving the small balance product into the broader Conventional infrastructure reflects the maturity of the platform and the desire to create a more consistent experience across all Freddie Mac products.

The practical benefit is in process alignment, where borrowers may see more familiar documentation, a more consistent servicing framework, and a clearer connection to Freddie Mac's Conventional platform.

What clients should take away

Optigo® Conventional Small aligns Freddie Mac’s small balance offering with their long-standing Conventional platform. It may be useful for borrowers with eligible $2M to $10M requests, particularly when the property profile, affordability characteristics, and pricing line up with Freddie Mac's current appetite.

For sponsors, the main takeaway is not that Freddie’s small balance execution has changed across the board – it has simply been redesigned to more closely align with Freddie’s Optigo® Conventional program. As one of Freddie Mac's top Optigo® lenders and the #1 Fannie Mae Small Loan producer in 2025, Walker & Dunlop can help borrowers compare the available agency executions and identify where the updated Freddie Mac product may or may not fit.

Ready to explore the right agency execution for your property? Connect with our small balance multifamily finance experts.