Agency Lending Through Fannie Mae, Freddie Mac, and HUD

The most competitive permanent financing in commercial real estate comes from government-sponsored enterprises. Non-recourse, 30+ year terms, and rates that conventional lenders rarely match.

Fannie Mae, Freddie Mac, and HUD Lending Programs

Agency loans are the gold standard for permanent multifamily and commercial financing. Fannie Mae (DUS), Freddie Mac (Optimus and SBL), and HUD/FHA programs offer non-recourse structures, interest-only periods, fully assumable terms, and fixed rates for up to 35 years. The catch is that agency lending has strict eligibility requirements around property condition, occupancy, and borrower experience, and the application process moves through approved correspondent lenders who control pricing and execution speed. CapitalAx works with multiple agency correspondents and delegated underwriters to shop your deal across competing execution platforms, ensuring you get the best rate, the most favorable prepayment structure, and a lender who can close on your timeline. We've placed agency financing on stabilized multifamily, affordable housing, senior living, and manufactured housing communities nationwide.

Key Terms

Loan Range: $1M to $100M+
Terms: 5 to 35 years
LTV: Up to 80%
Amortization: Up to 35 years
Recourse: Non-recourse available
Prepayment: Yield maintenance or defeasance

Who Is It For

  • Multifamily investors with stabilized apartment communities
  • Affordable housing developers and operators
  • Manufactured housing community owners
  • Senior housing and assisted living operators
  • Experienced borrowers seeking non-recourse permanent debt

Common Use Cases

  • Acquisition of stabilized multifamily properties
  • Rate-and-term refinance of existing apartment loans
  • Cash-out refinance to access equity in multifamily assets
  • Affordable housing preservation and acquisition
  • Bridge-to-agency takeout for value-add multifamily

Borrower Scenarios

  • A multifamily syndicator acquiring a 96-unit stabilized apartment community for $12.4M, placing a Fannie Mae DUS loan at 75% LTV with a 12-year fixed rate, 2 years of interest-only, and full non-recourse terms that protected the LP investors' personal assets.
  • An affordable housing operator refinancing a 64-unit Section 8 property through Freddie Mac's targeted affordable housing program, locking in a 15-year fixed rate 40 basis points below conventional quotes with a supplemental loan provision for future capital needs.
  • A manufactured housing community owner placing a $3.2M Freddie Mac SBL loan on a 120-pad community with 95% occupancy, closing in 45 days with streamlined underwriting and a 10-year term at a rate 75 basis points below the best bank quote received.
  • An investor completing a value-add renovation on a 48-unit apartment building, transitioning from a 24-month bridge loan into a Fannie Mae permanent facility with a 35-year amortization and yield maintenance prepayment, dropping the all-in rate from 9.2% to 5.6%.

Why CapitalAx

Multiple Agency Correspondent Relationships: Agency loan pricing varies between correspondents because each has different servicing spreads and execution capabilities. We submit your deal to multiple Fannie Mae DUS lenders and Freddie Mac Optimus sellers simultaneously, creating competition for your business and ensuring you capture the best available rate.
Structured Prepayment Analysis and Negotiation: Agency prepayment provisions, yield maintenance, defeasance, and step-downs, can cost hundreds of thousands of dollars if structured incorrectly. We model each option against your hold period and exit strategy, then negotiate the structure that minimizes your total cost of capital over the life of the loan.
Bridge-to-Agency Transition Planning: Many of our agency placements begin during the bridge loan phase. We pre-qualify the property with agency correspondents before the bridge closes, so the permanent takeout terms are known and committed, eliminating the uncertainty that makes bridge loan exits stressful.

Frequently Asked Questions

What is the minimum property size for an agency loan?

Fannie Mae DUS programs typically start at $1M, while Freddie Mac's Small Balance Loan (SBL) program covers properties from $1M to $7.5M with streamlined underwriting. HUD/FHA programs work for larger projects and new construction. Properties generally need 5+ units and stabilized occupancy above 85-90%.

What makes agency loans non-recourse?

Non-recourse means the lender's remedy in a default is limited to the property itself, not the borrower's personal assets. Agency loans include standard 'bad boy' carve-outs for fraud, misrepresentation, and environmental issues, but routine business risk stays with the property. This structure protects borrowers' personal wealth and other investments.

Can I assume an agency loan when buying a property?

Yes, most Fannie Mae and Freddie Mac loans are fully assumable with lender approval. The new borrower must meet the agency's credit and experience requirements and pay an assumption fee, but the existing rate and terms transfer. This is a significant advantage when selling in a rising rate environment.