As capital markets have become increasingly crowded, competition to place capital is pushing some lenders to reach down and do smaller balance loans. “The mortgage bankers are really earning their money, because there are a lot of different choices,” says Mark Ventre, a senior vice president at Stepp Commercial, a multifamily investment brokerage firm based in Los Angeles. Lenders across the board are actively financing sub-$5 million loans, including banks, Fannie Mae and Freddie Mac, private debt funds, CMBS and even life insurance companies.

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