Essential Funding Solutions
Real Estate Investor and Small Business

October Funding

Essencap successfully closed a $4,100,000 commercial real estate refinancing loan by accessing the Small Balance Loan (SBL) with FNMA underwriting. The subject is a two-story, 80 units apartment building located in Summerville, SC. The sponsor purchased the property 18 month ago and invested over $750,000 on renovation. 

We are pleased to announce that Essencap successfully arranged a commercial real estate loan. The loan assists our client to refinance a high interest rate bridge loan into a low rate loan. The loan is at a 12 year term over 30 year amortizations and lock in to a low rate. 


What is SBL (Small Balance Lending)?

Small multifamily properties – with five to 50 units – compose a sizable portion of the multifamily rental market and much of this housing are for market rent, affordable to low-income households. The lending arena in this segment are inconsistent across lenders and regions and the secondary mortgage market has participated little compared to conventional market activities.

In line with Freddie Mac and Fannie Mae Multifamily’s mission, both entities launched the small balance loan (SBL) program focusing on loan amounts ranging from $1 million to $5 million; targeting properties with five to 50 units. Greater government-sponsored enterprise (GSE) presence in this segment will increase liquidity and stability. By structuring these loans into securities where private parties hold the first-loss position, the vast majority of the credit risk is shifted away from Freddie Mac, Fannie Mae and U.S. taxpayers.

Unknown to many borrowers who usually go to the local bank for apartment building loan. There are non-bank Freddie Mac and Fannie Mae underwriter that Essencap work with. The lending market is rather large and the loan is extremely competitive to local bank. 

Small balance multifamily lending volume in the first half of 2019 totaled $58.5 billion on an annualized basis, representing a 7.9% gain from 2018’s total.

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Essencap Funding LLC · 45 Middle Neck Rd Ste 220 · Great Neck, NY 11023-2124 · USA

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