The quick read: A Fannie Mae or Freddie Mac multifamily loan is sized at the lower of two numbers: the maximum loan-to-value, and the loan whose fully amortizing payment still clears the minimum debt coverage ratio (DCR) at the locked coupon. Freddie Mac's April 2026 fixed-rate and floating-rate term sheets set a 1.25x minimum amortizing DCR with a 75% to 80% maximum LTV. The U.S. Treasury's daily par yield curve put the 10-year at 5.10% on October 15, 2026. At an illustrative 6.70% coupon (that yield plus an assumed 1.60% spread), the coverage test caps a building valued at a 6.0% cap rate near 62% LTV, so DCR binds long before the 80% limit. Run your own building through the loan sizing calculator before you ask for a quote.
Which Treasury does each agency loan term price off?
An agency fixed-rate coupon is a Treasury index plus a spread, and Freddie Mac describes the Treasury index as the most volatile part of the coupon, while its floating-rate loan prices off 30-day Average SOFR rather than any Treasury yield. The quote names the exact index, so confirm it before you model proceeds.
Freddie Mac's Index Lock FAQs (May 2025) say an eligible borrower can lock the Treasury index any time after a signed application reaches Freddie Mac, then lock the spread through an early rate-lock or at the end of full underwriting. The fixed-rate sheet offers 5- to 10-year terms, and the floating-rate sheet offers 5-, 7- and 10-year terms. This article pairs each fixed term with the Treasury of the same length. That pairing is our working assumption; the lender's quote controls.
Here is the curve a quote would start from, taken from the U.S. Treasury's daily par yield curve table, which notes these par yields are commonly called constant maturity Treasury rates:
5-year Treasury, October 15, 2026 (U.S. Treasury): 4.91% 7-year Treasury, October 15, 2026 (U.S. Treasury): 5.00% 10-year Treasury, October 15, 2026 (U.S. Treasury): 5.10% 10-year Treasury, October 13, 2026 (U.S. Treasury): 5.21% 10-year Treasury, October 20, 2026 (U.S. Treasury): 5.12%
The curve is nearly flat between five and ten years: 19 basis points on October 15 (our arithmetic). The floating-rate loan is a different instrument. Freddie Mac's floating-rate sheet indexes the coupon to 30-day Average SOFR, offers an early rate-lock typically 60 to 120 days from rate-lock until purchase, and lists interest rate cap options, including cap coverage the borrower buys from an approved third-party provider. The floating sheet publishes the same DCR and LTV grid as the fixed sheet, but it does not say which rate goes into that DCR, so ask the lender before you model a floating loan.
What DCR and LTV limits do the agencies publish for 2026?
Freddie Mac's April 2026 fixed-rate and floating-rate term sheets publish the same grid: a 1.25x minimum amortizing DCR on every term, a 75% maximum LTV for terms of five to under seven years, and 80% for seven years and longer, dropping to 65% or 70% when the loan is interest-only for its full term.
Minimum amortizing DCR, all terms (Freddie Mac, 4/26): 1.25x Maximum LTV, 5-year to under 7-year term (Freddie Mac, 4/26): 75% Maximum LTV, 7-year term and longer (Freddie Mac, 4/26): 80% Maximum LTV, full-term interest-only (Freddie Mac, 4/26): 65% through the 7-year term, 70% above it Maximum amortization (Freddie Mac, 4/26): 30 years Minimum loan amount (Freddie Mac, 4/26): $10 million Refinance Test not required (Freddie Mac, 4/26): amortizing DCR of 1.40x or greater and LTV of 60% or less
Both sheets add that adjustments may be made depending on the property, product or market, so treat the grid as the published ceiling, not a promise.
Fannie Mae publishes its limits differently. Its Multifamily Guide assigns each loan an underwriting tier and points to its Multifamily Underwriting Standards (Form 4660) for the tier's minimum DSCR and maximum LTV, which is why this article quotes Freddie Mac's grid. The Guide does state the method: underwritten net cash flow divided by annual debt service on a level payment that includes amortization, at the greater of the actual note rate or the Underwriting Interest Rate Floor in Form 4660.
The agencies' 2026 lending budgets are set as well. The Federal Housing Finance Agency set the 2026 multifamily loan purchase caps at $88 billion for each Enterprise, $176 billion combined, required at least 50% of that business to be mission-driven affordable housing, and excluded workforce housing loans from the caps (FHFA, November 24, 2025).
Why does interest-only not raise agency loan proceeds?
Interest-only does not raise agency proceeds because both agencies test coverage on an amortizing payment: Freddie Mac's term sheets say the DCR for partial-term and full-term interest-only periods uses an amortizing payment, and Fannie Mae's Multifamily Guide requires the same level payment, including amortization, however long the interest-only period runs.
Interest-only changes what you pay, not what you can borrow. In the worked example below, a $12.40 million 10-year loan at 6.70% would pay about $830,650 a year interest-only, which $1.2 million of net cash flow covers 1.44 times (our arithmetic). The agencies size it on the roughly $960,000 amortizing payment instead, the payment that produces exactly 1.25x.
Full-term interest-only can cut proceeds. Freddie Mac lowers the maximum LTV to 65% through the 7-year term and 70% above it, and caps the combined maturity LTV of a partial interest-only loan at 70%. A partial interest-only loan needs at least two years of amortization, or it must meet the full-term interest-only requirements (Freddie Mac, 4/26).
Fannie Mae adds a rate floor. If the gross note rate is below the Underwriting Interest Rate Floor in Form 4660, the Guide says the lender must use the floor to set the permitted loan amount, so a coupon below the floor does not buy extra proceeds.
How do you find the binding constraint on an agency loan?
You find the binding constraint by computing two loan amounts, value times the maximum LTV and the loan whose amortizing payment equals underwritten net cash flow divided by the minimum DCR, and taking the smaller one; at an illustrative 6.70% coupon and 80% LTV, coverage wins whenever the cap rate is below 7.74%.
- Start from underwritten net cash flow: the lender's figure after its vacancy, expense and reserve adjustments, not the seller's pro forma.
- Build the coupon: the Treasury on the lock date plus the quoted spread. The term sheets do not publish spreads, so the 1.60% spread below is an assumption for illustration only.
- Convert the coupon into an annual loan constant on a 30-year amortization, the maximum on Freddie Mac's sheets.
- Divide net cash flow by 1.25, then by the loan constant. That is the DCR loan.
- Multiply value by the term's maximum LTV. That is the LTV loan.
- The smaller number is your proceeds before any lender adjustment.
Worked example (illustrative, our arithmetic): a stabilized building valued at $20,000,000 with $1,200,000 of underwritten net cash flow, a 6.0% cap rate, sized on a 30-year amortization at an assumed 1.60% spread over each Treasury.
| Sizing line | 5-year term | 7-year term | 10-year term |
|---|---|---|---|
| Sizing line Treasury on 2026-10-15 (U.S. Treasury) | 5-year term 4.91% | 7-year term 5.00% | 10-year term 5.10% |
| Sizing line Illustrative coupon (Treasury plus 1.60%) | 5-year term 6.51% | 7-year term 6.60% | 10-year term 6.70% |
| Sizing line Minimum amortizing DCR (Freddie Mac, 4/26) | 5-year term 1.25x | 7-year term 1.25x | 10-year term 1.25x |
| Sizing line Maximum LTV (Freddie Mac, 4/26) | 5-year term 75% | 7-year term 80% | 10-year term 80% |
| Sizing line Annual loan constant, 30-year amortization | 5-year term 7.59% | 7-year term 7.66% | 10-year term 7.74% |
| Sizing line Loan the DCR test allows | 5-year term $12.64 million | 7-year term $12.53 million | 10-year term $12.40 million |
| Sizing line Loan the LTV test allows | 5-year term $15.00 million | 7-year term $16.00 million | 10-year term $16.00 million |
| Sizing line Binding test | 5-year term DCR, at 63.2% LTV | 7-year term DCR, at 62.6% LTV | 10-year term DCR, at 62.0% LTV |
| Sizing line Cap rate above which LTV binds | 5-year term 7.12% | 7-year term 7.66% | 10-year term 7.74% |
Three things follow. First, the flat curve buys little: the 5-year's lower coupon adds about $246,000 of DCR proceeds over the 10-year, and its 75% LTV cap never comes into play because coverage binds first. Second, the rate tape matters. The 10-year printed 5.21% on October 13 and 5.10% on October 15; at the same spread, that 0.11-point move changes the 10-year DCR loan on this example by about $139,000 (our arithmetic), which is the risk Freddie Mac's Index Lock and early rate-lock exist to manage. Third, the gap between about 62% and 80% is equity unless underwritten net cash flow rises or the spread tightens. Freddie Mac's sheets list supplemental loans as available subject to the loan agreement, which is a later second loan once income grows, not extra proceeds at closing.
The refinance waiver costs proceeds too. To skip Freddie Mac's Refinance Test, the example would need a 1.40x amortizing DCR, about $11.07 million at 6.70% (our arithmetic), which is also under the 60% LTV limit of $12.0 million.
How do you get an agency multifamily loan sized and placed at today's rates?
Option 1, our recommendation, is a commercial mortgage brokerage that rebuilds the lender's coverage math before any quote and sends one complete package to agency and other multifamily programs at once, so you compare the binding test and the spread side by side. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors.
Option 1: a commercial mortgage brokerage (our pick). YieldStack's software matches the deal against a catalog of 20,000+ loan programs, a count of programs rather than of lenders. Human brokers then structure the request, negotiate for the borrower and carry the deal toward closing. On a coverage-bound agency loan, that structuring is where proceeds are won: the net cash flow the lender underwrites, the lock timing and the spread. The agency loan page summarizes the product.
Option 2: an agency lender directly. Freddie Mac's term sheets direct borrowers to its Optigo lenders, and Fannie Mae loans run through its DUS lenders, explained in what a DUS lender is. A direct quote is one lender's read of the coverage math and one spread.
Option 3: a bridge loan first. If the building cannot clear 1.25x on an amortizing payment today, an agency quote will come back small. A bridge loan buys time to raise net cash flow; bridge versus Fannie Mae covers that choice.
What to send for an agency sizing:
- Trailing 12-month operating statement and a current rent roll
- Most recent appraisal or valuation, if you have one
- Target loan amount, term and hold plan
- Fixed or floating preference and the prepayment structure you can accept
- Sponsor experience and a personal financial statement
- Payoff statement on any existing loan
When the package is ready, send the deal for review. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
The bottom line
With the 10-year Treasury at 5.10% on October 15, 2026, agency proceeds on a stabilized building are set by coverage, not leverage. Freddie Mac tests a 1.25x DCR on an amortizing payment even when the loan is interest-only, so an illustrative 6.70% coupon caps a 6.0% cap-rate building near 62% LTV. Raise underwritten net cash flow, tighten the spread or time the lock; interest-only and a higher LTV limit will not close the gap.