What is a Fannie Mae DUS loan and what are the terms?

How DUS works

Under DUS, a network of approved lenders (Berkadia, Walker & Dunlop, Greystone, and others) originates and underwrites loans on Fannie Mae's behalf, keeps a 5% risk share, and sells the senior 95% to Fannie Mae as a security. That delegation is what gives DUS its speed edge — 30-45 days to commitment versus 60-90 for HUD 223(f).

Standard DUS parameters

• •Loan size: $1M to $100M+, no statutory ceiling
• •Term: 5/7/10/12/15/20 years; 25-30 year amortization; full-term IO on lower-leverage deals
• •Max LTV: 80% on most market-rate; 75% student/senior; 65% small balance; up to 75% affordable
• •Min DSCR: 1.25x amortizing standard; 1.30x full-term IO; lower on affordable
• •Non-recourse with standard carve-outs; yield maintenance during lockout, open at par the last 3 months

Tier pricing and Mission Driven

Fannie classifies markets into three tiers by liquidity and demographics. Tier 1 (top MSAs) gets the lowest spreads; the Tier 1-to-Tier 3 spread runs roughly 25-40 bps on the same product. Deals with 20%+ of units at ≤80% AMI under a long-term covenant earn a Mission Driven pricing improvement of about 15-25 bps, with Green Rewards adding another 5-10 bps for qualifying energy retrofits.