In the ongoing quest to find a bank to refinance a multifamily property loan, you will inevitably stumbled across Fannie Mae’s list of DUS Lenders.
What is a DUS Lender?
As Fannie Mae writes on their website:
Our multifamily business relies on its Delegated Underwriting and Servicing (DUS®) program to finance quality, sustainable, and affordable rental housing. It is executed primarily through its partnership with the DUS Lender network of 24 financial institutions and independent mortgage lenders.
Fannie Mae
The DUS Lender network, are banks that give loans according to the terms setout by Fannie Mae. In order to get a loan, you can also use the independent mortgage lenders that are not listed on the Fannie Mae website.
A DUS Lender is just a higher level of lender that does more of the work involved, before submitting the loan application to Fannie Mae for approval.
Should I start with a DUS Lender?
It can’t hurt to start discussions with DUS Lenders, because what is the worst thing they will tell you? No.
An easier way to actually get refinancing is to speak with a smaller HUD lender, who has the time and broad knowledge to analyze your multifamily properties unique situation, and help find a solution.
Confusion is just the Beginning of the Problem
Like many players in the commercial real estate market, we believe we know what type of financing we are looking for.
Many investors are sitting here are the beginning of 2025 saying it is only a matter of time before interest rates go back down to 3%. If I can only find a lender to give me a bridge loan for 2 years I will be good.
Before discussing whether interests will go up or down, let’s look a the Bridge Loan option from Fannie Mae called: Flexible Choice Bridge.
The first item to zero in on is the eligibility for this loan! It clearly states that the loan is for: Existing, stabilized Multifamily Affordable Housing (MAH) Properties.
Does your multifamily property meet that criteria?
This is why it is important to get on the phone with a commercial mortgage broker, that offers more than just HUD Loans.
You want to speak with a lender who has the ability to shop your loan around to multiple lenders. It could be a Local Bank, a National Bank, a Foreign Wealth Fund, a Family Office or a Venture Capital Firm.
That hardest part in refinancing a multifamily property in a period of interest rate volatility, is the limited amount of “willing” lenders.
In the world of commercial finance, uncertainty causes inaction. It is too risky to lend money today, if tomorrow, the bank can get a higher rate.
What are HUD Loans Good For?
HUD is a great option for non recourse loans, but it comes with a price.
HUD loans in general are made for stable properties, that are fully occupied and running smoothly. HUD can be used for new developments also. However, most private investors start with a local bank to fund the development, and after the property stabilizes, refinance with HUD.
Another issue that arises with HUD loans are the prepayment penalty. With the Structured ARM Loans, you cannot refinance in the first year, and then there is a prepayment premium of 4% in the second year, 3% in the third year, 2% in the fourth year, and 1% thereafter.
So again, a HUD Loan is for the long term.
DUS Lenders – Fannie Mae Multifamily
25 DUS Lenders are listed on the Fannie Mae website as of January 2025.
- Arbor Commercial Funding
- Basis Investment Group
- Bellwether Enterprise Real Estate Capital
- Berkadia Commercial Mortgage
- Capital One
- CBRE Multifamily Capital
- Citi Community Capital
- Colliers Mortgage
- Grandbridge Real Estate Capital
- Greystone Servicing Company
- HomeStreet Bank
- JLL Real Estate Capital
- JPMorgan Chase
- KeyBank National Association
- Lument Capital
- M&T Realty Capital Corporation
- National Cooperative Bank
- Newmark
- Newpoint Real Estate Capital
- Northmarq
- PGIM Real Estate
- PNC Real Estate
- Regions Real Estate Capital Markets
- Walker & Dunlop
- Wells Fargo Multifamily Capital
