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Agency multifamily loans: the lowest-cost permanent debt for stabilized apartments

Agency multifamily is the government-sponsored permanent debt program from Fannie Mae (DUS) and Freddie Mac (Optigo) for stabilized apartment buildings of five units or more. It delivers the lowest fixed rates, high leverage (up to ~75–80% LTV, with DSCR usually the binding constraint), non-recourse structure, and long 30-year amortization. North Bay Capital is a brokerage — we run your deal through both agencies' approved lender networks to win the best execution and place the loan.

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What it is

Agency multifamily refers to permanent apartment loans backed by the two government-sponsored enterprises: Fannie Mae, through its DUS (Delegated Underwriting and Servicing) platform, and Freddie Mac, through its Optigo program. Both run small-balance tracks (Fannie Mae SBL up to $9M, Freddie Mac Optigo SBL to roughly $7.5M) and full standard/conventional execution above that, with no real ceiling, for stabilized properties with five or more residential units. Because the loans are sold into agency mortgage-backed securities, pricing is consistently lower than bank or CMBS debt, terms are non-recourse, and amortization runs a full 30 years. North Bay Capital does not lend — we source and place these loans through agency-approved lenders, shopping Fannie and Freddie side by side on every deal.

Ideal for
  • Acquiring a stabilized 10–60 unit apartment building with strong, documented in-place income (T-12 financials and a clean rent roll)
  • Refinancing out of a maturing bank or bridge loan onto long-term, low-fixed-rate non-recourse debt
  • Cash-out refinance on a seasoned property where NOI has grown — pulling equity for the next acquisition at up to ~75% LTV
  • Investors prioritizing the lowest rate and longest amortization over maximum flexibility or speed
  • Workforce-housing and green-certified properties that qualify for agency mission-driven or green rate reductions
Typical terms
Typical loan size
~$1M–$9M small-balance (Fannie SBL to $9M, Freddie SBL to ~$7.5M); standard execution above, no real ceiling
Leverage
Up to ~80% LTV purchase / ~75% LTV cash-out refi; min DSCR 1.20–1.25x by market tier
Rate type
Fixed 5, 7, 10, 12, 15, 20, up to 30-yr (longest terms fully amortizing, no balloon) or hybrid ARM; interest-only at lower leverage
Term / Amortization
5–15 year term, 30-year amortization
Recourse
Non-recourse with standard bad-boy carve-outs
Speed
~45–60 days to close (longer for full standard underwriting)
Worth weighing
  • Property must be stabilized — agencies want documented in-place income and high occupancy. Lease-up, heavy value-add, or deferred-maintenance deals usually need bridge debt first, then a refi into agency.
  • Prepayment is restrictive: most fixed-rate agency loans carry yield maintenance or defeasance, which can be expensive if you sell or refinance early. Hybrid ARMs offer a softer step-down but at a higher rate.
  • Eligibility rules are strict — generally 5+ residential units with the large majority of the building's area residential. Mixed-use with a large commercial component, or buildings the agency box won't fit, are better placed with a bank or portfolio lender.
Frequently asked

Agency multifamily (Fannie Mae / Freddie Mac) — questions

What's the difference between Fannie Mae DUS and Freddie Mac Optigo?

They are the two agency multifamily platforms and they compete head-to-head. Fannie Mae DUS delegates underwriting to approved lenders for fast, consistent execution; Freddie Mac Optigo runs small-balance and conventional tracks with a similar profile. On most deals the winner moves around based on market tier, leverage, prepay choice, and property type, so we quote your loan through both and place it with whichever delivers the best rate and terms.

Are agency multifamily loans really non-recourse?

Yes. Both Fannie and Freddie agency loans are non-recourse, meaning the property secures the debt and your personal assets aren't on the line for repayment. The exception is standard 'bad-boy' carve-outs — fraud, misappropriation of funds, unauthorized transfers, or filing bankruptcy to delay foreclosure can trigger personal liability. That non-recourse structure is one of the biggest advantages over bank and credit union debt, which is usually full or partial recourse.

How much can I borrow, and what is the minimum DSCR?

Agency programs reach up to roughly 80% LTV on a stabilized purchase and about 75% on a cash-out refinance, with a minimum debt-service coverage ratio (DSCR) generally between 1.20x and 1.25x depending on the market tier. The cash flow constraint often binds before the LTV cap — the building has to clear the DSCR test at the requested loan amount, so a lower-yielding property may size below the maximum leverage.

Why use North Bay Capital instead of going to a lender directly?

North Bay Capital is a brokerage, not a lender. Agency loans are originated through a network of approved Fannie and Freddie lenders, and pricing and appetite differ between them on any given week. We run your deal through multiple agency shops, package the financials and rent roll the way underwriters want to see them, and negotiate the best execution — then manage the close. You get competitive tension and a single point of contact rather than one lender's take-it-or-leave-it quote.

Have a deal?

Let's find the right capital for it.

Tell us about the asset and the business plan — we'll source and place the financing across our lender network.

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