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By Erika Morphy/Globe Street
Fannie Mae’s DUS lending machine came roaring back at the end of 2025 – and it did so without sacrificing credit discipline, signaling a meaningful improvement in multifamily debt availability for borrowers who can clear still‑steady underwriting bars.
Trepp’s analysis shows that Fannie Mae’s Delegated Underwriting and Servicing production jumped to $24.1 billion in the fourth quarter of 2025, up from $18.3 billion in the third quarter, a roughly one‑third increase in just three months. Volume was also materially higher than the $19.0 billion recorded in the fourth quarter of 2024, giving the move more weight than a typical year‑end push.
By Trepp’s count, it was Fannie’s largest DUS quarter since the fourth quarter of 2020 and it capped a year in which issuance accelerated through each quarter rather than relying on a late‑year catch‑up as in 2024. For borrowers, that pattern reads more like a sustained reopening of a core permanent capital channel than a one‑off spike.
Trepp attributes the rebound primarily to a higher loan count rather than bigger checks. Average securitized loan size in the fourth quarter was roughly flat compared with a year earlier, edging up only modestly from the third quarter, suggesting the incremental $5‑6 billion of quarterly volume was spread across more transactions rather than driven by a handful of outsized deals.
That breadth matters for market participants: it suggests Fannie Mae was willing and able to finance a wider swath of stabilized multifamily properties, rather than concentrating capacity in a narrow slice of institutional‑scale assets.
Underwriting Stays in Its Lane
The sharp pickup in origination did not coincide with an obvious loosening in underwriting, according to Trepp’s review of loan metrics. Loan‑to‑value ratios drifted modestly higher year-over-year. Still, debt service coverage and debt yields stayed within recent ranges quarter-over-quarter, a sign that lower rates and improved pricing did more of the work than stretching structure.
In practical terms, more borrowers could make the numbers pencil under familiar DUS constraints, rather than Fannie Mae bending those constraints to chase volume.
The term profile also moved in a direction that runs counter to a “reach” narrative. Trepp notes a more pronounced shift toward five‑year executions in the quarter‑over‑quarter comparison, indicating that borrower preference for shorter maturities strengthened as 2025 progressed.
Rising volume, therefore, did not require extending duration risk; borrowers increased activity while anchoring to shorter reset horizons. For owners looking to manage through rate uncertainty, that combination – more available capital on shorter paper – is a meaningful data point.
Structurally, interest‑only remained the dominant mode of execution. Trepp reports that pure interest‑only balloon loans and hybrid IO/amortizing structures continued to account for the bulk of production, with only modest quarter‑to‑quarter shifts and no meaningful change in the overall mix compared with a year earlier.
Historically, periods of rapid growth in structured lending have sometimes brought longer interest‑only periods, thinner amortization or other mechanics that add risk at the margin; Trepp’s read is that this time, volume scaled inside the established DUS framework. For experienced borrowers, that means the late‑2025 “better feeling” in the DUS channel reflected price and execution rather than a fundamentally different box.
What Borrowers Can Infer About Liquidity
Where and how Fannie Mae grew in the fourth quarter matters for how sponsors should think about multifamily financing availability in 2026. Trepp’s breakdown shows that apartments and cooperatives accounted for the overwhelming majority of issuance and almost all of the quarter’s dollar growth came from that core bucket.
Specialized segments – including Section 8, manufactured housing, affordable and student housing – posted only modest gains and remained relatively small in absolute terms. In Trepp’s view, the DUS expansion is better characterized as a deepening of conventional multifamily lending than a push into higher‑complexity or niche products.
Geographically, origination growth was broad‑based. Trepp finds issuance increased across all nine Census regions on both a quarter‑over‑quarter and year‑over‑year basis, with the South Atlantic and Pacific remaining the largest contributors in dollar terms.
At the same time, some of the most eye‑catching year‑over‑year gains came in the Middle Atlantic, Mountain and West South Central regions, where activity rebounded from low prior levels and then continued to grow into year‑end.
New England also registered outsized year‑over‑year gains off a depressed base, suggesting that Fannie Mae’s DUS capital is now reaching back into markets that had been on the sidelines earlier in the cycle.
The regional patterns also hint at where the recovery remains incomplete. Trepp notes that the Pacific and Mountain regions posted only modest sequential increases and remain down year-over-year, indicating steady execution rather than a new expansion leg.
Meanwhile, East North Central and East South Central show strength in both measures, pointing to a more sustained acceleration and not just base effects. For owners and investors, this fragmentation underscores that while DUS liquidity has clearly improved, the intensity of that rebound varies by geography and capital allocation is still moving toward previously lagging regions rather than piling on in already active coastal hubs.
A Reset, Not a Rerun of 2020
Trepp distinguishes the current expansion and the prior run‑up in 2020 and 2021. Then, volume surges were paired with more pronounced increases in average loan size, and in some cases shifts in structure, as capital chased larger deals amid different macro conditions. In 2025, by contrast, Trepp’s data point to higher issuance generated by more loans of similar size, with credit, structural and term metrics all largely in line with recent experience.
For commercial real estate borrowers in the multifamily space, the message is nuanced but constructive. Fannie Mae’s DUS program appears to be offering more “shots on goal” for stabilized properties, at a time when other debt channels – banks, non‑banks, securitization – remain selective and, in some cases, balance‑sheet constrained.
Trepp’s conclusion that lenders were able to scale originations “within an established credit and structural framework” suggests that this is not a fleeting chase for volume but a recalibration of capacity as rates and spreads move into a more workable range.
From an investor’s vantage point, the fourth quarter data marks a meaningful turning point: Fannie Mae is once again printing its largest quarters since the early pandemic period, but this time on a foundation of steady credit, smaller‑average deals and broader regional participation. If those conditions hold, the DUS channel could remain a reliable pillar of multifamily liquidity into 2026, particularly for conventional apartments in markets that sat out much of the last two years of activity.