Agency Multifamily Loans: Fannie Mae DUS Underwriting Tiers, Amortization & Supplemental Financing

## Fannie Mae DUS Multifamily Lending Framework

The Fannie Mae Delegated Underwriting and Servicing (DUS) program provides non-recourse liquidity for stabilized multifamily assets containing 5 or more residential units.

### 1. The Four Underwriting Tiers

Fannie Mae structures leverage and coverage constraints across four risk tiers:

| Parameter | Tier 1 | Tier 2 (Standard) | Tier 3 | Tier 4 |
|:----------|:------:|:-----------------:|:------:|:------:|
| Minimum DSCR | 1.55x | 1.25x | 1.15x | 1.20x |
| Maximum LTV | 55% | 80% | 85% | 75% |
| Amortization | 30 Years | 30 Years | 30 Years | 30 Years |
| I/O Duration | Full Term | 1 - 3 Years | 0 - 1 Year | Full Term |

### 2. Maximum Loan Sizing Formula

Lenders size the loan as the lesser of two binding tests:

$$\text{Max Loan}_{\text{DSCR}} = \frac{\text{Underwritten Net Operating Income}}{\text{Minimum DSCR} \times \text{Annual Mortgage Constant}}$$

$$\text{Max Loan}_{\text{LTV}} = \text{Appraised Market Value} \times \text{Max LTV \%}$$