Fannie Mae Multifamily Loans

Fannie Mae does not lend directly. It buys multifamily loans from a limited group of approved Delegated Underwriting and Servicing lenders, who underwrite to Fannie Mae's standards, close with their own capital and retain a share of the loss on every loan they sell. That risk-sharing is why DUS execution is fast by agency standards: the delegated lender can commit without sending the file to Washington. For a stabilized apartment property, it is usually the most efficient permanent debt available.

The program's defining features are non-recourse structure, terms ranging from five to thirty years, amortization up to thirty years, and pricing tiers that reward lower leverage and stronger coverage. Fannie Mae also prices down loans that meet affordability criteria — rent-restricted units, workforce housing, green building certifications and energy efficiency improvements — which can be worth real basis points on an otherwise conventional deal. In exchange, borrowers accept monthly escrows for taxes and insurance, replacement reserves based on a physical needs assessment, and a defined prepayment structure, most often yield maintenance.