Mortgages with original balances of $100,000 or less accounted for 2.3% of mortgage originations so far in 2026, down from 2.7% in 2025 and 3.1% in 2024, according to Realtor.com Economic Research. The 2026 figure is year to date, not a final full-year result. The decline reflects a shrinking supply of lower-priced homes as well as financing frictions, but the available data do not quantify how much each factor contributes.
What the 2026 figures show
Realtor.com Economic Research defines a small-dollar mortgage in its current analysis as a loan balance of $100,000 or less. On that basis, its reported share has fallen well below its level a decade ago:
| Period | Share of mortgages with balances of $100,000 or less |
|---|---|
| 2013 and 2014 | More than 12% in each year |
| 2024 | 3.1% |
| 2025 | 2.7% |
| 2026 so far | 2.3% (year to date) |
These are Realtor.com estimates, based on data it says draw on Optimal Blue and FFIEC HMDA information accessed through the CFPB HMDA Platform. The report does not publish a reproducible query, exact 2026 cutoff, or detailed denominator reconciliation, so the figures should be attributed to Realtor.com rather than treated as an independently reproduced official annual series. The FFIEC separately published its 2025 HMDA snapshot from reports by 4,782 U.S. financial institutions, frozen as of June 1, 2026; that broader snapshot is not itself the source of Realtor.com’s small-mortgage share calculation. Realtor.com Economic Research; FFIEC.
Small loans and low-priced home sales are related, but not the same measure
Realtor.com reports that homes selling for $150,000 or less accounted for 36.7% of home sales in 2013 and 8.8% so far in 2026. It compares that sales share with the share of mortgages below $100,000: the ratio was roughly three from 2013 to 2019 and close to four in 2025–2026.
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This is an indication of a widening gap, not a direct matching rate. The loan and home-price thresholds differ, and not every home purchase uses a mortgage or produces a loan balance below the threshold. Realtor.com’s comparison does not establish how many lower-priced sales were financed by small mortgages.
Where small mortgages are more common
The share varied substantially by location in Realtor.com’s 2025 data. Rural ZIP codes had the highest share among the listed categories, while urban and suburban shares were lower:
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| ZIP-code category | Share of mortgages under $100,000 in 2025 |
|---|---|
| Rural | 7.7% |
| Town | 4.9% |
| Urban | 2.4% |
| Suburban | 2.3% |
By state, Iowa had the highest reported share at 9.6%, followed by Wyoming at 8.6%. Those figures describe the share of mortgages in each geography, not the number of small loans. Realtor.com’s threshold is under $100,000; other sources use different definitions. HUD, for example, discusses mortgages under $150,000, so its historical counts are not directly comparable to Realtor.com’s current series.
Why are small mortgages harder to get?
Fewer lower-priced homes mean fewer opportunities
A smaller pool of lower-priced homes naturally limits the number of potential small mortgages. Realtor.com identifies the declining availability of such homes as an important broad explanation for the long-term retreat. But the under-$100,000 mortgage share has fallen faster than its comparison measure for low-priced home sales, suggesting supply alone may not explain the difference.
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Fixed costs weigh more heavily on a smaller loan
Some mortgage costs do not shrink in proportion to the loan balance. Origination and servicing expenses can therefore make a modest loan less attractive to originate. Realtor.com also discusses fee limits and appraisal costs as possible frictions; HUD describes fixed origination and servicing costs as a challenge to the economics of smaller balances. These sources identify plausible barriers, not a quantified breakdown of the recent decline. HUD USER.
Property condition can complicate financing
Low-cost homes may need repairs or have condition issues that complicate an appraisal or underwriting. In an Urban Institute analysis of 2020 property records, property condition played a larger role in denials for loans under $100,000 than for larger loans. That finding helps explain a potential obstacle, but it is historical context, not a current measure of 2026 denial reasons. The same analysis found that about a third of low-cost homes were purchased with a mortgage, compared with more than 80% of homes selling for at least $100,000. Urban Institute.
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- SPEAKS YOUR LANGUAGE: Keys clearly labeled in residential mortgage finance terms like Loan Amt, Int, Term, Pmt; this industry-standard calculator is super easy to use on all realty financing matters from finding a loan that works for your client to considering trust deeds investments, or finding remaining balances or balloon payments and more
- CONFIDENTLY AND EASILY SOLVE: Clients' financial questions whether they're buyers, sellers, investors or renters. Increase your perceived professionalism as a new agent, experienced broker or seasoned loan officer. Close more home sales and impress your clients with fast, accurate answers to all their real estate finance questions from PITI Payments to IRR, NPV and Cashflows
- DEDICATED BUYER QUALIFYING KEYS: Enter client's income, debt and expenses to pre-qualify them to only show properties they can afford. Include tax, insurance and mortgage insurance then compare loan options and payment solutions to give your client choices before they make an offer to buy
- FIGURE OUT THE RIGHT LOAN: For your client at the press of a button for jumbo, conventional, FHA/VA, or even 80:10:10 or 80:15:5 combo loans; check to see if ARMs or bi-weekly loans, quarterly payments or if interest-only payments are the answer; giving your client more choices; easily perform what if loan or TVM calculations find loan amount, term, interest or PITI or PI payments
- BECOME AN INVALUABLE RESOURCE: To your clients by reducing their confusion and uncertainty; ensuring they are able to make a purchase offer; knowing they can afford the down payment; and determining which is the right loan for them. Date-math for listings and contracts too. Comes with a protective slide cover, quick reference guide, pocket user's guide, and long-life battery
Secondary-market access can affect lender incentives
Lenders may sell eligible mortgages to investors, including Fannie Mae and Freddie Mac, rather than keep them on their own books. Pew reports that from 2018 through 2024, the two government-sponsored enterprises purchased 690,000 small conventional conforming mortgages, equal to 47.9% of that segment, compared with 52.7% of larger loans. Pew estimates that matching the larger-loan purchase rate could have enabled another 70,000 small-loan sales worth $6.7 billion. Its analysis concerns secondary-market purchases, not every kind of mortgage or the entire cause of the recent decline. The Pew Charitable Trusts.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.A small balance does not necessarily mean a weaker borrower
Realtor.com reports that in 2026 buyers with mortgage balances under $100,000 had an average FICO score of 737, compared with 736 for all buyers. Their median down payment was 34.4% of purchase price, versus 14.6% for all purchases. The same report says small-mortgage borrowers paid higher rates, including in owner-occupant comparisons. Those figures do not show that every borrower or loan is alike; they do challenge the assumption that small balances are uncommon simply because the borrowers have weaker credit.
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What policy changes are being discussed
Realtor.com says the 21st Century ROAD to Housing Act authorizes a four-year FHA pilot intended to offset fixed costs through lender payments, adjusted terms, closing-cost grants, outreach, and technical assistance. It also describes CFPB studies concerning originator compensation and points-and-fees limits, along with appraisal-related provisions.
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These are reported policy responses, not evidence that the pilot has produced more loans. The available account does not establish final funding, operating details, or results. Separately, Pew proposes reviewing restrictions affecting seasoned-loan and bulk sales and considering securities devoted to small mortgages; those are policy proposals, not announced commitments from Fannie Mae or Freddie Mac.
How borrowers can compare lenders for a modest loan
Because lender minimums, property eligibility, and fees vary, compare the full offer rather than relying on a headline rate. Ask each lender the same questions and compare written estimates for the same loan amount, term, occupancy, and property.
- Minimum loan and location: Ask whether the lender originates loans at the balance you need and in the property’s state or county.
- Rate and APR: Compare interest rates and APRs for the same term and loan structure.
- Fees in dollars: Request origination, appraisal, and other charges, then consider each fee both as a dollar amount and as a share of the loan.
- Property condition: Ask how the lender evaluates repair needs and whether renovation financing is available or required.
- Occupancy: Confirm eligibility for an owner-occupied home, second home, or investment property as applicable.
- Loan sale and timing: Ask whether the lender expects to retain or sell the loan and what that means for documentation, servicing, or closing timelines.
Broader mortgage totals should not be mistaken for a recovery in small purchase lending: Urban Institute reports that overall originations rose 9.4% from 3.9 million in 2024 to 4.3 million in 2025, while home-purchase activity rose 1.2%; the overall increase was mainly refinance-led. Urban Institute.
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