Fannie Mae Multifamily: What Brokers Should Know

Fannie Mae is one of the most well-known capital sources in the multifamily space — and for good reason. The agency offers long-term, nonrecourse financing at competitive rates for qualified properties and sponsors. But not every deal fits, and the process is more rigid than conventional bank lending.

This guide — part of our comprehensive series on all major commercial loan types — breaks down when Fannie makes sense, what to watch out for, and how to help your borrowers succeed.

What Is a Fannie Mae Multifamily Loan?

Fannie Mae provides long-term financing for stabilized multifamily properties through its DUS (Delegated Underwriting and Servicing) program. Approved lenders originate the loans and sell them into the secondary market, making the process more standardized than many conventional executions.

These loans are nearly always nonrecourse (with carve-outs for fraud, naturally, and environmental risk), and terms typically range from 5 to 12 years. Amortization is usually 30 years, with partial interest-only sometimes available. The Small Loan program (generally $1 million to $9 million) offers a streamlined path for smaller deals with experienced sponsors.

When a Fannie Mae Loan Makes Sense

These loans are best for stabilized assets with consistent cash flow, backed by strong sponsors. Think of Fannie as a great option for borrowers who want certainty: long-term, nonrecourse, fixed-rate debt with low execution risk — assuming the deal checks all the right boxes.

This works particularly well for acquisitions or refinances of core multifamily properties, especially when the borrower wants to avoid bank scrutiny or recourse. Cash-out refis are also common, provided the asset supports it.

Use cases include:

• Acquiring stabilized properties
• Refinancing stabilized assets out of bridge debt
• Cash-out refis on well-performing deals

You'll note that construction isn't in the list of uses above. That's because Fannie (and Freddie) multifamily loans simply aren't available for any kind of development or major rehab financing.

What Lenders Want to See

Lenders underwriting Fannie Mae deals care about numbers, not potential. The property needs to be fully stabilized — usually at least 90 percent occupied for the past 90 days — and generate strong in-place NOI. DSCR typically needs to hit 1.25x or better, and the sponsor’s net worth and liquidity should meet minimums.

For Small Loan executions, the sponsor’s track record and property management plan matter even more.

This isn’t a "story" lender — it’s a cash-flow-first execution.

What Brokers Often Miss

1. Submitting before stabilization

Fannie won’t entertain a deal unless the property is fully leased and performing. Near-stabilized isn’t good enough.

2. Underdelivering on sponsor strength

Even if the deal pencils, weak sponsors can get cut. Ensure they have the balance sheet and track record.

3. Confusing Fannie and Freddie

They’re not the same. Freddie has different pricing, programs, and process. Know which fits better. They truly are not interchangeable.

4. Overlooking third-party costs and timelines

Fannie deals take time. Appraisal, engineering, and environmental reports all matter — and can delay closing.

5. Not prepping the borrower for structure

Nonrecourse doesn’t mean zero strings. Lockboxes, reserves, and replacement escrows may apply.

What to Do If It Doesn’t Fit

If your deal doesn’t qualify for Fannie — maybe due to market, asset type, or sponsor profile — try:

• Freddie SBL: More flexible in some areas, especially for smaller loans
• Non-agency perm lenders: Like banks or credit unions
• Bridge loan now, Fannie later: Refi post-stabilization
• Bring in a co-sponsor: To strengthen balance sheet or track record

Tips to Place These Deals

• Run DSCR and LTV math using in-place numbers — no pro forma
• Get a clean rent roll and trailing 12 P&L upfront
• Package the sponsor bio, REO schedule, and financials clearly
• Know your lender’s Small Loan requirements if under $9 million
• Talk timing early — these loans don’t close in 3 weeks

What This Means for Brokers

Fannie Mae multifamily loans offer attractive long-term debt, but only for borrowers and properties that fit the mold. As a broker, your value comes from filtering those deals before wasting anyone’s time (including your own).

Make sure your borrower is bringing the right mix of documentation, experience, and asset quality. Lenders want clean packages, clear narratives, and numbers that already work — not stories about what might be. If a deal doesn’t quite fit yet, your job is to help the client tighten it up, improve the underwriting picture, or consider alternatives in the meantime. Fannie is reliable, but only when you deliver what they expect.

As a broker, your job is to bring the right mix of deal, sponsor, and documentation to the table. If you do that, Fannie can be a consistent and powerful execution for stabilized multifamily deals.