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A Big Year for Small Balance Loans

January 22, 2018

Steve Johnson

There is no doubt that 2017 was a huge year for the Small Balance Loans (SBL) business – at Freddie Mac and each of your firms. To be honest, every time I look at the numbers we tallied together in 2017, I think of the story of The Little Engine That Could. If you haven’t seen the numbers yet, take a look:

  • 2,669 small balance loans executed
  • 86% increase in UPB year-over-year
  • 9.4% of Freddie Mac Multifamily’s volume
  • 29,611 low-income (5-50) units
  • 30,924 very low-income units
  • 67% uncapped (fitting FHFA criteria for mission-based loans)

So how did we grow so much, in both size and volume, without losing the special mojo that SBL is known for? The answer is easy and always the same – the people working this business! From the dedicated Freddie Mac underwriters, producers, attorneys and support teams to the fantastic staffs at each of our Seller/Servicers and our Single Counsel, none of this would be possible without the human touch. Our business is and always will be based on relationships, intuitions, conversations and individual credit decisions. That is what gives us our greatest advantage.

Last year we worked hard to implement several new processes and enhancements to make the loan process easier for Borrowers, Brokers, Sellers and ourselves. And at every step of the way, you adjusted, experimented, learned and gave us feedback. A true collaboration indeed. And that’s why each of you own a piece of this success.

We should all be immensely proud of what we accomplished, but at the end of the day this is about much more than just numbers. We’ve been able to improve the cost of capital to aggressively compete in larger markets where the affordability crisis is at its greatest. That directly equates to homes for individuals and families who work hard and deserve a safe and affordable place to live.

Thank you for your commitment to this business.

Onward and upward in 2018!