MULTIFAMILY AGENCY LOANS
Fannie/Freddie
$1MM to $100MM+
Agency Multifamily Apartment Loans
Overview
Agency loans are multifamily loan programs sponsored by government-sponsored enterprises (GSEs) — Fannie Mae and Freddie Mac — that provide competitive, long-term financing for the acquisition, refinance, or rehabilitation of apartment buildings with five or more units.
These programs are not direct government loans, but they are backed or purchased by Fannie Mae and Freddie Mac from approved lenders, making them low-risk for lenders and attractive for borrowers.
Key Features
| Feature | Fannie Mae & Freddie Mac Loans |
|---|---|
| Loan Size | $1 million to $100+ million |
| Property Type | Multifamily (5+ units), senior housing, student housing |
| Loan Term | 5 to 30 years |
| Amortization | Up to 30 years (interest-only options available) |
| LTV (Loan-to-Value) | Up to 80% |
| DSCR (Debt Coverage) | 1.20x to 1.25x (varies by market and property) |
| Interest Rate | Fixed or floating, very competitive |
| Non-Recourse | Yes, with standard carve-outs |
| Prepayment | Yield maintenance or declining prepay (step-down) |
| Assumable | Yes (subject to lender approval) |
Eligible Property Types
Conventional multifamily (5+ units)
Affordable housing (LIHTC, Section 8)
Senior housing (independent or assisted living)
Student housing (dedicated student occupancy)
Manufactured housing communities (Freddie Mac only)
Fannie Mae vs Freddie Mac — Key Differences
| Feature | Fannie Mae | Freddie Mac |
|---|---|---|
| Loan Origination | Delegated Underwriting (DUS) lenders | Optigo Seller/Servicers |
| Affordability Focus | Strong affordable housing incentives | Offers tailored affordable housing programs |
| Recycling of Capital | Lenders hold risk-share; encourages fast closings | Freddie often buys whole loans, securitizes |
| Underwriting Process | Delegated to lender (faster decision making) | More centralized with Freddie |
Underwriting Guidelines
Agency lenders will analyze:
Net Operating Income (NOI) and DSCR
Stabilized occupancy (usually 90%+ for past 90 days)
Rent roll, trailing 12-month financials, and property condition
Borrower experience and financial strength
Location: property must be in eligible markets
Benefits for Borrowers
Long-term fixed rates with attractive terms
Non-recourse structure protects personal assets
Flexible underwriting with interest-only options
High leverage (up to 80%)
Assumable loans, aiding future buyers
Ideal for stabilized or affordable properties
Typical Restrictions
Not ideal for value-add deals needing major renovations
Typically requires professional property management
Stabilization required – not suited for lease-up properties
Complex documentation and third-party reports required (appraisal, Phase I ESA, PCA)
Required Documents for Loan Review
Documents Typically Required
Personal financial statement & real estate schedule
Rent roll & operating statements
Purchase contract (if acquisition)
Property photos and marketing materials
Entity formation documents
Third-party reports (Appraisal, Environmental, PCA)
Ideal Borrower Profile
Strong multifamily ownership or management experience
Good personal liquidity and net worth
Clean credit and no major bankruptcies or foreclosures
Willing to comply with GSE reporting and management standards