Loans for large apartment properties

The short version

For a stabilized property above the agency small-loan caps, start with the two agencies and FHA, then use a life company or CMBS quote to test them. Use bridge debt only when the property is not yet stabilized.

Your situation	Start here	Then test against
Stabilized, want the most proceeds at a fixed rate	Fannie Mae DUS, Freddie Mac Optigo	FHA 223(f) if you can wait
Stabilized, low leverage, want the lowest rate	Life company	Agency at the same leverage
Want maximum leverage and a fully amortizing fixed loan	FHA 223(f)	Agency plus supplemental later
Plan to sell within a few years	Agency floating rate, bank	Bridge if not stabilized
Lease-up or renovation ahead	Bridge, debt fund	Plan the agency takeout now
Ground-up development	FHA 221(d)(4), construction loan	Bridge for lease-up, then agency
Portfolio or very large single asset	SASB, agency credit facilities	CMBS conduit, life company

Programs ranked for a stabilized 50+ unit property

Rank	Program	Why it ranks here	Where it loses
1	Fannie Mae DUS	80% max LTV2, 1.25x min DSCR2, 5 to 30 year terms5, non-recourse, lenders with delegated authority	Stabilized occupancy required; yield maintenance on most fixed loans
2	Freddie Mac Optigo	Same headline leverage on 7-year and longer terms, a strong floating-rate menu	$10 million minimum6 on the conventional fixed product; defeasance after securitization
3	FHA 223(f)	The most leverage and the longest fixed term, fully amortizing, non-recourse	Slow, a statutory lockout, Davis-Bacon and HUD process rules on later work
4	Life company	Often the lowest rate at low leverage, flexible on structure, long rate locks	Wants lower leverage, newer or core-located property, and strong sponsors
5	CMBS conduit	Non-recourse, interest-only common, takes markets and assets agencies avoid	Defeasance, lockbox and servicer rules; less flexible after closing
6	Bank	Relationship pricing, floating or short fixed, light prepayment	Recourse and shorter terms
7	Bridge and debt fund	Funds transitional plans on today’s business plan, not today’s income	Floating rate, rate cap cost, extension tests

Supplemental loans, mezzanine and preferred equity are layers on top of a senior loan, not substitutes for it.

Agency terms side by side

Term	Fannie Mae DUS	Freddie Mac Optigo (conventional)	FHA 223(f), market rate
Max LTV	80% max LTV2	80% max LTV (7-year+), 75% (5 to under 7 years)6	87% LTV3
Min DSCR	1.25x min DSCR2	1.25x min DCR6	1.15x DSCR3
Term	5 to 30 year terms5	5 to 10-year terms; up to 30 if not purchased for securitization6	Up to 35 years (or 75% of remaining economic life), minimum 107
Prepayment	Yield maintenance on fixed-rate loans; declining prepayment premium on variable-rate loans2	Yield maintenance until securitized, then 2-year lockout and defeasance; open final 90 days6	Prepayment generally prohibited for 5 years from endorsement7
Rate lock	30- to 180-day rate lock commitments5	Early rate lock typically 60 to 120 days until purchase; Index Lock available6	Locked at endorsement through the HUD process
Occupancy	Stabilized occupancy, typically 90% for 90 days before funding5	Stabilized	Stable occupancy of at least 85%7
Insurance premium	None	None	0.25% (25 basis points) per year8, plus 0.25% upfront, capitalized into the loan

Two FHA details change the math on large properties. Above the large-loan line ($130 million⁹), market-rate 223(f) sizing drops to 1.30x DSCR, 75% LTV, 70% with cash out. And FHA loan amounts are also capped per unit by statute, starting from $108,925 per unit before high cost adjustment¹¹ for a two-bedroom elevator unit; high-cost areas lift that: Up to 270% of base limits; up to 315% case by case in High Cost Areas⁹.

What large-loan underwriters focus on

• Trailing income, not pro forma. Agencies underwrite in-place collections over a recent trailing period, with concessions and bad debt deducted. A rent bump you just pushed through may count only after it shows up in collections.
• Economic occupancy. Physical occupancy can be high while collections lag. Lenders compare the rent roll to the operating statement and the bank statements.
• Expense ratios against comparable properties. Lenders benchmark taxes, insurance, payroll and repairs per unit against their own portfolio data.
• Tax reassessment on a sale. In reassessment states, the lender underwrites the tax bill on your purchase price, not the seller’s bill.
• Physical needs. The property condition report sets repair escrows and the replacement reserve per unit. Deferred capital on older assets can shift the loan into a supplemental strategy later.
• Sponsor depth. Net worth, liquidity, track record with similar assets, and any prior defaults or deeds-in-lieu. For FHA large loans: Net worth of at least 20% and liquidity of at least 7.5% of the loan amount¹⁰.
• Affordability and mission. at least 50% mission-driven¹² is the 2026 target for each agency’s purchases, so rent-restricted and workforce units get better pricing or cap-exempt treatment.
• Green improvements. Fannie Mae Green Rewards adds up to 5% more loan proceeds than a non-green DUS loan when improvements meet the savings test: Improvements must project 30% combined energy and water savings, at least 15% from energy¹³.

Sizing example (illustration)

An illustration, not a quote. A stabilized 180-unit property worth $36,000,000 with $2,160,000 of underwritten NOI (a 6.0% cap rate).

Test	Agency (80% / 1.25x, 30-year, illustrative 6.20%)	FHA 223(f) (87% / 1.15x, 35-year, illustrative 6.40% plus 0.25% annual premium)
LTV test	$36,000,000 x 80% = $28,800,000	$36,000,000 x 87% = $31,320,000
Debt service the NOI supports	$2,160,000 / 1.25 = $1,728,000	$2,160,000 / 1.15 = $1,878,000
Loan constant	7.35%	7.17% plus 0.25% premium = 7.42%
DSCR test	$1,728,000 / 7.35% = $23,511,000	$1,878,000 / 7.42% = $25,322,000
Loan	$23,511,000 (65% LTV)	$25,322,000 (70% LTV)
Debt yield	9.2%	8.5%

In this illustration we add the annual premium to the FHA debt service to keep the comparison conservative. Coverage binds both loans, as it does on most stabilized apartments at today’s rates. FHA’s lower coverage requirement and longer amortization buy about $1.8 million more proceeds; the cost is the time, the lockout and a fully amortizing payment schedule. The FHA loan also stays under the per-unit statutory limit here, at about $141,000 a unit.

To see how far a lower rate or interest-only would move the agency number, run the loan sizer. For the debt yield a CMBS or life company lender would test, use the debt yield calculator.

Supplemental loans: the second bite

A supplemental loan adds a second agency mortgage on the same property once income has grown, without paying off the first loan and its yield maintenance.

Term	Fannie Mae Supplemental	Freddie Mac Supplemental
Combined leverage	as high as 70% LTV, depending on asset class and use of proceeds14	80% combined LTV at 1.25x (7-year term)15
Coverage	as low as 1.30x14	Combined test on both loans
Timing	available 12 months after the senior loan closes14	at least 12 months after the first loan; not in its last 3 years15
Minimum	Lender policy	$1 million minimum supplemental15

Supplementals are why many sponsors pick a 10-year agency loan over a shorter bank loan on a value-add plan that is already mostly stabilized.

Credit performance by lender type

Apartment loans perform very differently by who holds them, which explains why each lender type prices the same building differently:

Holder	Source and date	Reading
CMBS, multifamily loans	Trepp, September 2026	8.04%16 delinquent
Fannie Mae and Freddie Mac	MBA, Q3 2026	1.16%, up from 1.11% in Q2 (MBA)17
FHA multifamily and health care	MBA, Q3 2026	0.90%, down from 1.06% in Q2 (MBA)17
Banks, multifamily loans	FDIC, Q2 2026	1.10% of bank multifamily loans noncurrent18

Each source defines delinquency its own way (days past due, noncurrent, real estate owned), so compare the gap between lender types more than the exact levels. The gap is the point: securitized apartment loans have been far more troubled than agency, FHA or bank apartment loans.

Programs to avoid, and when

• Bridge debt on a stabilized property. You pay floating rates, a cap and exit fees for flexibility you do not need.
• CMBS when you may sell early. Defeasance after a lockout makes an early sale expensive. Conduit call protection in a 2026 deal, for example: 24-month lockout, then defeasance, open the final 7 months¹⁹.
• FHA on a deal with a short hold. The statutory lockout and the process cost only pay off over a long hold.
• Recourse bank debt on a large asset when a non-recourse agency loan is available at similar proceeds.

Where volume is going

The MBA’s Q2 2026 survey showed lender mix shifting: CMBS up 68%, depositories (banks) up 61%, investor-driven lenders up 18%, Fannie Mae and Freddie Mac down 17%, life companies down 27%²⁰. By property type, year over year: Retail up 61%, office up 47%, hotel up 19%, multifamily up 8%, industrial up 6%, health care down 19%²⁰. Bridge lenders remain active at moderate leverage; one large mortgage REIT reported +2.9% over benchmark (6.7% weighted average cash coupon)²¹ on its floating book at 65%²¹ weighted average LTV.