Fannie Mae has increased the loan limit of small multifamily mortgage loans to $6 million, from $3 million or less nationwide and $5 million or less in high-cost markets. The objective was to ensure an adequate supply of affordable housing.

The changes will simplify the definition of a small loan and provide more opportunities for borrowers to realize the benefits of streamlined third-party report, underwriting and asset management requirements, according to Fannie Mae. The increase in the small mortgage loan limit is effective immediately and the higher loan amounts will be offered across the U.S.

"Increasing the loan limit for our small mortgage loan program will provide more capital and liquidity to the small loan marketplace and help address the significant affordable workforce housing supply issues facing our country today," said Michael Winters, vice president, multifamily customer management for Fannie Mae. "Our commitment to providing sustainable financing solutions that enhance affordability, security, and convenience of financing smaller properties plays an important role in securing a key source of housing for working families."

In addition to increasing the small mortgage loan size limit, Fannie Mae has added several new eligible markets that receive pricing and underwriting benefits. The new metropolitan statistical areas are: Denver, Miami, Minneapolis, and Salt Lake City. These markets have seen credit and economic performance that is comparable to the metropolitan statistical areas that are in the program, including Baltimore; Boston; Chicago; Los Angeles; New York City; Oxnard, Calif., Philadelphia; Portland, Oregon, Sacramento; San Diego; San Francisco; San Jose; Seattle; and Washington, DC.