Fannie Mae DUS Loans

Multifamily Loans for Apartment Buildings and Multifamily Developments Insured by Fannie Mae

It’s no secret that the Fannie Mae DUS loan is one of the most popular multifamily loan options in the industry. DUS loans typically have a minimum loan amount of $3 million, making them a standard when it comes to financing more expensive properties, although smaller amounts can be negotiated at the lender’s discretion. Like many other Fannie Mae loan options, DUS loans offer competitive interest rates, are mainly non-recourse, and are fully assumable (with lender approval).

Fannie Mae DUS Loans can be utilized for acquisitions, refinancing, and even cash-out refinancing of multifamily properties. Their flexibility is near unmatched with a plethora of repayment term lengths and both floating and fixed interest rate financing options. Unlike many of the other offerings from Fannie Mae, however, DUS loans are not fully amortizing, and are therefore balloon loans.

2021 Sample Fannie Mae Terms For DUS Loans

Size: Typically $3 million or higher with no set maximum, but smaller loans may be available on a case-by-case basis.

Terms: 5, 7, 10, 12, 15, 18, 20, 22, 25, and 30 year fixed-rate loan terms available, variable-rate (with option to convert to fixed-rate) and interest-only loan options are also available

Amortization: Up to 30 years, most loans are balloon loans, hybrid options may be available for a fee

MaximumLTV: 80%, 75-80% for cash-out refinances

MinimumDSCR: 1.25x

Recourse: Most loans are non-recourse with standard “bad boy” carve-outs

Prepayment Options: Yield maintenance or 1% prepayment penalty, whichever is larger

Credit Requirements: A credit score of 680+ typically required (may be somewhat flexible, depending on the situation)

Eligible Borrowers: Borrowers must typically be a U.S. bankruptcy remote, single asset Single Purpose Entity (SPE), though this may vary by lender. Partial, indirect foreign ownership is allowed with proper structuring.

Eligible Properties:

Properties with 5+ units are eligible for Fannie Mae DUS loans, including:

  • Townhomes
  • Co-ops
  • Mixed-use commercial/residential properties
  • Condos
  • Properties with tenant-based Section 8 contracts

However, some property types are ineligible for Fannie Mae DUS loans, including:

  • Properties with a homeowner's association (HOA)
  • Fractured ownership condos
  • Housing Assistance Program properties (these are eligible for Fannie Mae Multifamily Affordable Housing Loans)
  • Non-contiguous townhomes or duplexes (these may be eligible with a waiver, but that can be difficult to obtain)
  • New construction developments or properties that require substantial rehabilitation
  • Properties involving a healthcare component


  • Very competitive interest rates
  • Up to 80% LTV
  • Most loans are non-recourse
  • Supplemental loans are permitted after 12 months
  • 30- 180 day rate locks available after commitment (some lenders may allow rate locks of up to 1 year)
  • Mezzanine financing is available
  • Interest-only payment options are also available
  • Loans are assumable with lender approval


  • Requires replacement reserves
  • Typically requires 85% physical occupancy, 80% economic occupancy for 90 days before closing
  • Requires third-party reports including an Appraisal, a Physical Needs Assessment, and a Phase I Environmental Assessment
  • Requires a $20,500 application deposit and a $3,000 processing fee
  • Absentee owners typically need to hire third-party management and need a strong track record in the multifamily industry (local owners typically do not)
  • Subordinate debt is not allowed
  • Often requires a credit score of 680 (though this may be flexible)