A Fannie Mae multifamily loan is one of the most competitive financing options available for apartment building investors and owners. Backed by the Federal National Mortgage Association (Fannie Mae), these loans offer non-recourse terms, low interest rates, high leverage, and long fixed-rate periods that few other lending sources can match. Whether you are acquiring your first 5-unit property or refinancing a 500-unit apartment complex, Fannie Mae's multifamily programs provide a pathway to favorable financing.
This guide covers Fannie Mae's DUS program, Small Loans program, Green Rewards, current rates, borrower requirements, and how these loans compare to Freddie Mac and HUD alternatives in 2026.
Need Financing for This Project?
Stop searching bank by bank. Get matched with 6,000+ vetted lenders competing for your deal.
What Is the Fannie Mae DUS Program and How Does It Work?
The Fannie Mae Delegated Underwriting and Servicing (DUS) program is the primary channel through which multifamily borrowers access Fannie Mae financing. Launched in 1988, the DUS program allows approved lenders to underwrite, close, and sell multifamily loans to Fannie Mae without prior Fannie Mae review of each individual loan.
There are 24 designated DUS lenders that retain a portion of the credit risk on each loan, aligning their interests with Fannie Mae. Key features include:
- Loan amounts starting at $3 million with no upper limit
- Fixed-rate terms of 5, 7, 10, 12, 15, and 30 years
- Adjustable-rate options with 5, 7, or 10-year initial periods
- Maximum LTV of 80% (75% for cash-out refinances)
- Minimum DSCR of 1.25x
- Non-recourse structure with standard carve-outs for bad acts
- Interest-only options including partial-term and full-term IO
- Supplemental loans available after 12 months of seasoning
In 2025, Fannie Mae provided $74 billion in multifamily financing, and the FHFA raised the 2026 cap to $88 billion per agency. For borrowers seeking permanent financing on stabilized properties, the DUS program is often the most cost-effective option available.
What Is the Fannie Mae Small Loans Program?
The Fannie Mae Small Mortgage Loan Program serves smaller multifamily properties with loan amounts from $750,000 to $9 million. It uses streamlined underwriting that reduces closing timelines and costs compared to the standard DUS program, making it ideal for 5-50 unit apartment buildings.
Program highlights include:
- Loan amounts from $750,000 to $9 million
- Fixed-rate terms of 5 to 30 years
- Maximum LTV of 80%
- Minimum DSCR of 1.25x
- Non-recourse with standard carve-outs
- Streamlined process with faster closings (30-45 days)
- Lower costs due to simplified third-party report requirements
Eligible properties include conventional apartments, affordable housing, seniors housing, student housing (5+ units), and manufactured housing communities with 50+ pad sites. The non-recourse structure and long-term fixed rates give Fannie Mae a competitive edge over local bank financing. To understand the differences, see our guide on recourse vs non-recourse commercial loans.
What Are Current Fannie Mae Multifamily Loan Rates?
Fannie Mae multifamily rates are determined by adding a lender spread to the corresponding Treasury yield. Spreads typically range from 175 to 250 basis points over the index. As of early 2026, approximate rate ranges by term are:
- 5-Year Fixed: 4.85% to 5.25%
- 7-Year Fixed: 5.00% to 5.40%
- 10-Year Fixed: 5.20% to 5.60%
- 12-Year Fixed: 5.35% to 5.75%
- 15-Year Fixed: 5.50% to 5.95%
- 30-Year Fixed: 5.85% to 6.30%
These rates assume standard leverage (65-75% LTV), stabilized properties, and borrowers with strong financial profiles. Higher leverage, interest-only periods, and weaker markets can push spreads wider by 10-30 basis points.
Several factors influence your specific rate. Treasury yields make up the largest component, with the 10-year Treasury driving pricing on the most popular terms. Lender spreads vary by DUS lender, so shopping 2-3 lenders can yield meaningfully different pricing. Property characteristics also matter: Class A properties in strong markets receive tighter spreads than Class C properties in secondary markets. Loan structure affects pricing as well, with interest-only periods and higher LTVs carrying wider spreads.
To estimate monthly payments, use our commercial mortgage calculator.
What Are the Minimum Requirements to Qualify for a Fannie Mae Multifamily Loan?
Fannie Mae has specific requirements for both borrowers and properties. Falling short on any criterion will likely disqualify your application.
Borrower Requirements
Fannie Mae evaluates the loan sponsor (the guarantor on non-recourse carve-outs) against these criteria:
- Credit score: Minimum 680 FICO
- Net worth: Equal to or greater than the requested loan amount
- Liquidity: Cash and liquid assets equal to 6-12 months of mortgage payments
- Experience: Minimum of 2 years owning multifamily properties with 5+ units
- Clean history: No bankruptcies in the last 7 years, no foreclosures in the last 10 years, and no history of financial crimes
For borrowers who lack multifamily experience, Freddie Mac may be a better fit since they accept first-time borrowers who live within 100 miles of the property and hire professional property management.
Property Requirements
The property must meet Fannie Mae's eligibility standards, which prioritize stabilized, well-maintained apartment communities:
Properties that do not meet the 90% occupancy threshold may still qualify through Fannie Mae's pre-stabilization program on a case-by-case basis, though these loans carry additional restrictions and pricing adjustments.
Use our DSCR calculator to verify that your property generates sufficient cash flow to meet the 1.25x minimum coverage requirement.
What Is the Non-Recourse Structure and Why Does It Matter?
All Fannie Mae multifamily loans carry a non-recourse structure, meaning the lender's recovery in a default is limited to the collateral property. Your personal assets, other real estate, and business interests are protected from lender claims, unlike recourse loans from banks where lenders can pursue personal assets.
Loans include standard "bad boy" carve-outs that trigger full recourse for fraud, misappropriation, failure to maintain insurance, or voluntary bankruptcy. These carve-outs are industry standard and rarely triggered by borrowers acting in good faith. The non-recourse structure is especially valuable for portfolio investors because it limits downside on any single property to the equity invested. For a detailed comparison, read our guide on recourse vs non-recourse commercial loans.
Ready to explore Fannie Mae financing for your multifamily property? Contact our team for a free consultation and rate quote.
What Interest-Only Options Are Available?
Fannie Mae offers both partial-term and full-term interest-only (IO) periods on multifamily loans. Partial-term IO allows interest-only payments for 1-5 years before transitioning to fully amortizing payments, making it popular with value-add investors. Full-term IO means interest-only payments for the entire loan term, with the full balance due at maturity.
IO options carry a modest pricing premium of 5-15 basis points over fully amortizing rates. Properties must demonstrate strong DSCR to qualify. For a deeper analysis, see our guide on interest-only vs amortizing commercial loans.
What Is the Fannie Mae Green Rewards Program?
The Fannie Mae Green Rewards program is a green financing add-on that provides financial incentives to borrowers who make energy-efficient and water-saving improvements to their multifamily properties. Green Rewards can be combined with any DUS or Small Loans product.
To qualify, borrowers must commit to improvements that reduce energy and/or water consumption by at least 30%, completed within 12 months of closing. Eligible improvements include ENERGY STAR appliances, high-efficiency HVAC systems, WaterSense fixtures, LED lighting, solar PV systems, and building envelope upgrades.
Fannie Mae provides a complimentary High Performance Building Report that assesses current efficiency and calculates projected savings. As of 2023, Fannie Mae had issued over $117 billion in Green Bonds, financing over 550,000 multifamily units.
How Does Fannie Mae Compare to Freddie Mac and HUD?
Fannie Mae is not the only agency option for multifamily financing. Freddie Mac and HUD/FHA both offer competitive programs with different strengths. Choosing the right agency depends on your property type, loan size, timeline, and borrower profile.
Choose Fannie Mae when:
- You need interest-only options (HUD does not offer them)
- Your property is in a smaller market (Fannie Mae lends in nearly any population center)
- You want faster closing (45-60 days vs 120-180 for HUD)
- You have multifamily experience and strong financials
Choose Freddie Mac when:
- You are a first-time multifamily investor (no experience requirement with professional management)
- You want a Small Balance Loan ($1M-$7.5M) with competitive terms
- Your property is within 100 miles of your primary residence
Choose HUD/FHA when:
- You want the longest fixed-rate term available (up to 35 years)
- You need the highest leverage (up to 87% LTV)
- Closing timeline is not a concern (120-180 days)
- Your loan is $4 million or larger
For borrowers who qualify for multiple programs, working with an experienced commercial mortgage advisor is essential to determine which agency product delivers the best overall execution. Contact our team to compare options side by side.
What Are the Prepayment Penalty Options?
Fannie Mae multifamily loans include prepayment provisions that protect the lender's yield if the borrower pays off the loan early. Understanding these options is critical because the wrong prepayment structure can cost hundreds of thousands of dollars if you sell or refinance before maturity.
The three primary prepayment structures are:
Yield Maintenance
Yield maintenance is the most common structure. The penalty is based on the difference between the loan rate and the current Treasury rate, multiplied by the remaining term. A 6-month open period before maturity means no penalty in the final months. Costs are highest early and decline as the loan matures.
Defeasance
Defeasance replaces the loan collateral with government securities that replicate remaining cash flows, allowing you to sell the property while the loan remains outstanding. It typically has a 3-year lockout period and involves a 1% commitment fee plus transaction costs.
Step-Down Prepayment
Step-down penalties start at a fixed percentage (typically 5%) and decline annually. For example, a 5-4-3-2-1 step-down charges 5% in year one, 4% in year two, and so on. These structures offer predictable costs but are not available on all products.
What Is the Fannie Mae Multifamily Loan Application Process?
The Fannie Mae multifamily loan process from application to closing typically takes 45-60 days for standard DUS loans and 30-45 days for Small Loans. The DUS lender handles the entire process, including underwriting, without requiring prior Fannie Mae approval.
Here is what to expect at each stage:
Step 1: Pre-Qualification (Week 1-2)
Submit a deal summary to a DUS-approved lender with the property address, unit count, rent roll, trailing 12-month operating statement, and borrower bio. The lender provides preliminary sizing with estimated loan amount, rate range, and terms.
Step 2: Formal Application (Week 2-3)
Submit 3 years of property operating statements, current rent roll, capital expenditure history, 3 years of tax returns, personal financial statement, schedule of real estate owned, and entity documents.
Step 3: Underwriting and Due Diligence (Week 3-6)
The DUS lender orders an MAI appraisal, Phase I Environmental Site Assessment, property condition assessment, and seismic study (if applicable). The underwriter analyzes cash flow, market conditions, and borrower strength.
Step 4: Rate Lock and Commitment (Week 5-7)
The lender issues a commitment letter with final terms. You can lock your interest rate at this point. Fannie Mae offers both standard and extended rate lock options.
Step 5: Closing (Week 6-8)
Sign loan documents, fund escrow accounts, and receive loan proceeds. The DUS lender sells the loan to Fannie Mae but continues servicing it.
Which Multifamily Properties Qualify for Fannie Mae Financing?
Fannie Mae finances a broad range of multifamily property types, provided they meet minimum eligibility standards. The property must have at least 5 residential units and demonstrate stabilized occupancy of 90% or higher for at least 90 days prior to loan funding.
Eligible property types include:
- Conventional apartments (garden, mid-rise, high-rise)
- Affordable housing (LIHTC, Section 8, rent-restricted)
- Seniors housing (independent living, assisted living with restrictions)
- Student housing (purpose-built with individual leases)
- Manufactured housing communities (50+ pad sites)
- Cooperative housing (with appropriate legal structure)
- Military housing (on a case-by-case basis)
Properties that do not qualify include single-family homes, 2-4 unit properties, hotels, short-term rentals, properties with significant deferred maintenance, and those with environmental contamination. For properties undergoing renovation, Fannie Mae offers moderate rehabilitation loans alongside the acquisition or refinance.
How Can You Maximize Your Fannie Mae Loan Amount?
Getting the highest possible loan amount from Fannie Mae requires optimizing both the property's financial performance and the loan structure. Here are proven strategies that experienced multifamily investors use:
Increase NOI before applying. Raising rents to market, reducing vacancy, and cutting expenses boost the NOI that drives loan sizing. Even adding a utility bill-back program can increase proceeds significantly.
Choose a longer amortization. A 30-year schedule reduces annual debt service, improving DSCR and allowing a larger loan. Compare options using our commercial mortgage calculator.
Add an interest-only period. IO periods lower debt service, improving DSCR-constrained sizing.
Apply for Green Rewards. Unlock up to 5% additional proceeds based on projected utility savings.
Shop multiple DUS lenders. Getting quotes from 2-3 DUS lenders ensures competitive pricing.
Want help structuring the optimal Fannie Mae loan for your apartment building? Contact our commercial lending team for a free analysis.
What Are the Most Common Questions About Fannie Mae Multifamily Loans?
What is the minimum loan amount for a Fannie Mae multifamily loan?
The minimum loan amount depends on the program. Fannie Mae's Small Loans program starts at $750,000, while the standard DUS program has a $3 million minimum. There is no maximum loan amount for the DUS program, and Fannie Mae regularly finances deals exceeding $100 million.
What credit score do I need for a Fannie Mae multifamily loan?
Fannie Mae multifamily loans require a minimum credit score of 680 for the loan sponsor. Lenders prefer 700 or higher, but borrowers with lower scores may qualify with compensating factors such as strong net worth and extensive experience.
Are Fannie Mae multifamily loans non-recourse?
Yes. The lender cannot pursue personal assets beyond the collateral property in a default. Loans include standard carve-outs that trigger recourse for fraud, misappropriation, voluntary bankruptcy, and failure to maintain insurance.
How long does it take to close a Fannie Mae multifamily loan?
Standard DUS loans close in 45-60 days. Small Loans close in 30-45 days. Having complete documentation ready at application can reduce timelines by 1-2 weeks.
Can I get a Fannie Mae loan on a property with less than 90% occupancy?
Fannie Mae generally requires 90% occupancy for 90 consecutive days prior to funding. Properties with lower occupancy may qualify through the pre-stabilization program on a case-by-case basis, with additional reserves and pricing adjustments.
What is the difference between Fannie Mae and Freddie Mac multifamily loans?
Fannie Mae requires 2+ years of multifamily experience, while Freddie Mac accepts first-time investors who live within 100 miles and use professional management. Fannie Mae also lends in smaller markets. Rates and terms are generally comparable.
Can I get interest-only payments on a Fannie Mae multifamily loan?
Yes. Partial-term IO is available for 1-5 years before converting to amortizing payments. Full-term IO covers the entire loan term. IO carries a 5-15 basis point premium and requires strong DSCR.
What happens if I want to sell the property before the loan matures?
You will need to pay the applicable prepayment penalty or have the buyer assume the loan. Fannie Mae loans are assumable with lender approval and a 1% assumption fee, which is valuable when rates have risen since origination.
Clearhouse Lending specializes in Fannie Mae multifamily financing for apartment investors and owners nationwide. As experienced commercial mortgage advisors, we work with multiple DUS lenders to secure the best available rates and terms for acquisitions, refinances, and Green Rewards transactions. Contact us today to discuss your multifamily financing needs and get a customized rate quote.