The quick read: An apartment qualifies as workforce housing for a Fannie Mae or Freddie Mac loan when the owner voluntarily restricts rents on at least 20% of units to levels affordable at 80% of area median income (AMI), with higher AMI ceilings in costlier markets under some programs, and writes that restriction into the loan documents. FHFA's 2026 rules exclude workforce housing loans from the $88 billion cap on each Enterprise's multifamily purchases. The restriction only costs income where today's rents sit above the ceiling, so your rent roll decides whether the trade pays.
What do Fannie Mae and Freddie Mac require for a workforce housing loan?
Fannie Mae requires an existing, stabilized property, and both agencies require the owner to restrict rents on at least 20% of units to levels affordable at 80% of area median income, or higher in some costlier markets, written into the loan documents for the full loan term at Fannie Mae and up to 10 years at Freddie Mac.
Fannie Mae's Sponsor-Initiated Affordability (SIA) term sheet asks for existing, stabilized conventional properties with a minimum of 20% of units affordable to residents earning 80% of AMI or less, adjusted for family size, and rent that does not exceed 30% of adjusted AMI for the unit size. The rent and income restrictions must be in place by the loan origination date, and the property must comply with the SIA agreement within 12 months. Fannie Mae's SIA FAQ (dated January 1, 2026) adds that restricted units must be evenly distributed by bedroom size and that Small Mortgage Loans are not eligible for SIA pricing incentives.
Fannie Mae's Sponsor-Dedicated Workforce (SDW) term sheet uses the same 20% floor but restricts rent only: units must be affordable to households earning up to 80% of AMI or, in certain metros, up to 100% to 120% of AMI. Freddie Mac's Workforce Housing Preservation sheet has borrowers agree in the loan documents to rent restrictions on units affordable at 80% of AMI in standard markets and higher AMI levels in higher cost markets, with a programmatic minimum of 20% of units and no income tests.
FHFA's 2026 cap definitions exempt the full loan amount when the loan agreements require the sponsor to preserve affordability for at least 10 years or the term of the loan, at 80% of AMI in standard markets, 100% in cost-burdened renter markets and 120% in very cost-burdened renter markets, as FHFA designates them, or at the standard of a state or local housing affordability initiative.
Minimum restricted share (SIA, SDW and Workforce Housing Preservation): 20% of units Standard affordability level (FHFA 2026 definitions): 80% of AMI Cost-burdened and very cost-burdened markets (FHFA 2026 definitions): 100% and 120% of AMI Rent ceiling under Fannie Mae SIA: 30% of adjusted AMI for the unit size
How do Fannie Mae's and Freddie Mac's workforce programs compare?
Fannie Mae's SIA is the strictest of the three programs because it restricts both rents and tenant incomes under a recorded agreement that a third-party agent checks every year, while Fannie Mae's SDW and Freddie Mac's Workforce Housing Preservation restrict rents only and rely on an annual certification, which keeps compliance lighter for a conventional owner.
Table: agency workforce housing programs compared (from each agency's term sheet or program sheet)
| Feature | Fannie Mae SIA | Fannie Mae SDW | Freddie Mac Workforce Housing Preservation | Effect on your loan |
|---|---|---|---|---|
| Feature Minimum restricted units | Fannie Mae SIA 20% | Fannie Mae SDW 20% | Freddie Mac Workforce Housing Preservation 20% programmatic minimum | Effect on your loan Sets how many units carry a rent cap |
| Feature Affordability level | Fannie Mae SIA 80% of AMI or less | Fannie Mae SDW Up to 80% of AMI, or 100% to 120% in certain metros | Freddie Mac Workforce Housing Preservation 80% of AMI in standard markets, higher in higher cost markets | Effect on your loan A higher AMI means a higher rent ceiling |
| Feature What is restricted | Fannie Mae SIA Rent and tenant income | Fannie Mae SDW Rent only | Freddie Mac Workforce Housing Preservation Rent only, no income tests | Effect on your loan Income limits add tenant files |
| Feature How long | Fannie Mae SIA Entire loan term | Fannie Mae SDW Life of the loan | Freddie Mac Workforce Housing Preservation Lesser of the loan term or 10 years | Effect on your loan Caps rent growth on those units for that period |
| Feature Loan term and rate | Fannie Mae SIA 5 to 30 years, fixed or variable | Fannie Mae SDW 5 to 30 years, fixed or variable | Freddie Mac Workforce Housing Preservation Fixed rate, 7 years or longer | Effect on your loan Narrows your hold and rate choices |
| Feature Leverage | Fannie Mae SIA 80% LTV, 1.25x DSCR, 1.20x on Pre-Review | Fannie Mae SDW 80% LTV, 1.25x DSCR | Freddie Mac Workforce Housing Preservation 1.25x and 80% maximum | Effect on your loan Restricted rents must still clear 1.25x |
| Feature Annual monitoring | Fannie Mae SIA Third-party Administering Agent verifies rent and income | Fannie Mae SDW Borrower certifies and sends rent rolls to the Servicer | Freddie Mac Workforce Housing Preservation Borrower certifies rents | Effect on your loan Staff time and fees |
| Feature Documents | Fannie Mae SIA Recorded SIA Agreement (Form 6490) and Form 6271 | Fannie Mae SDW Forms 6271.SDW and 6325 | Freddie Mac Workforce Housing Preservation Freddie Mac Loan Agreement | Effect on your loan What the restriction runs through |
FHFA's November 18, 2024 cap fact sheet names SIA, SDW, Workforce Housing Preservation and Freddie Mac's Tenant Advancement Commitment as programs that support eligible workforce housing loans. Ask the lender how the loan will be classified under the 2026 definitions before you lock.
How long do the restrictions last and what is monitored?
Fannie Mae's workforce restrictions last for the entire loan term, while Freddie Mac's preservation period is the shorter of the loan term or 10 years, so a 12-year Freddie Mac loan carries 10 years of restrictions, and every program requires an annual compliance check that someone on your side has to staff and pay for.
SIA carries the heaviest file. Fannie Mae's SIA FAQ says the borrower engages an independent third-party Administering Agent within 30 days after origination. Tenants complete an income questionnaire at move-in and recertify every year, usually at lease renewal. A tenant stays eligible as long as household income does not exceed the income restriction by more than 140%, in Fannie Mae's wording. Fannie Mae's 2020 research found file reviews generally cost $30 to $50 per file. The loan document modification (Form 6271) sets noncompliance penalties, including recapture of the pricing incentive.
SDW is lighter: the Servicer manages the requirements, and the borrower submits an annual certification and rent rolls, with no third-party compliance requirement. Freddie Mac calls for an annual borrower certification of rent monitoring, with no income tests.
SIA restriction length (Fannie Mae SIA term sheet): entire loan term Workforce Housing Preservation period (Freddie Mac): lesser of the loan term or 10 years SIA Administering Agent engaged (Fannie Mae SIA FAQ): within 30 days of origination SIA file review cost (Fannie Mae 2020 research): $30 to $50 per file
Why does the cap exclusion matter for a borrower?
The cap exclusion matters because FHFA limits each Enterprise to $88 billion of multifamily loan purchases in calendar 2026, and a qualifying workforce loan does not count against that limit, so Fannie Mae or Freddie Mac can buy it without using any of the year's cap room that standard conventional loans draw on.
FHFA's release of November 24, 2025 set the 2026 caps at $88 billion for each Enterprise, $176 billion combined, required that at least 50% of the multifamily business be mission-driven affordable housing, and said that, just like in 2025, multifamily loans that finance workforce housing are excluded from the limits. All other mission-driven loans stay inside the caps. FHFA said it would raise the caps if necessary and would not reduce them if the market comes in smaller than projected.
A workforce loan also helps the Enterprise on the mission side. Under the 2026 definitions, FHFA classifies 100% of the loan amount as mission-driven when restricted units equal or exceed 20% of the total, and 50% when they are below 20%. Both Enterprises attach pricing language to these products: Fannie Mae's SIA FAQ lists preferential pricing resulting in a lower interest rate as a benefit, and Freddie Mac's sheet lists competitive loan pricing. Neither page publishes a fixed discount.
The exclusion is not new: FHFA's November 2024 fact sheet says workforce loans have been exempt since 2024 and that the Enterprises financed over $4.5 billion of them through the third quarter of 2024. None of the FHFA pages cited here reports 2026 cap usage, so ask each lender how its agency execution prices a workforce option against a standard one.
2026 cap per Enterprise (FHFA): $88 billion 2026 combined cap (FHFA): $176 billion Mission-driven minimum (FHFA): 50% of each Enterprise's multifamily business
What does a workforce restriction do to NOI and loan proceeds?
A workforce restriction lowers NOI only by the gap between today's rent and the restricted ceiling on the set-aside units, so a property whose units already rent below the ceiling gives up nothing today, while one renting above it loses about $10.50 of loan per $1 of annual NOI given up, at 1.25x on our illustrative terms.
Fannie Mae's SIA rent and income worksheet works an example with an FHFA AMI of $72,400: 80% of that is $57,920, a two-bedroom is sized at three persons with a 90% adjustment for a maximum income of $52,128, and 30% of that income gives a maximum rent of $1,303 a month including the utility allowance. Subtract the example's $110 standard utility allowance and the contract rent ceiling is $1,193. The worksheet notes that over 90% of Fannie Mae multifamily loans do not include utilities in rent, and FHFA then requires the standard utility allowance to be added, so check who pays utilities before you set the restricted rent.
Illustrative example (our arithmetic, not a quote or a lender offer): a 100-unit property of two-bedroom units rents at an assumed $1,450 a month and earns an assumed $900,000 of NOI. The owner restricts 20 units at the worksheet's $1,193 ceiling. Both cases are sized at 1.25x on an assumed 6.50% rate with 30-year amortization. For context, the 10-year Treasury yield was 5.13% on October 21, 2026, according to FRED.
Table: 20 restricted units versus none (illustrative)
| Line | No restriction | 20 units restricted |
|---|---|---|
| Line Rent on the 20 set-aside units | No restriction $1,450 | 20 units restricted $1,193 |
| Line Annual rent given up | No restriction None | 20 units restricted $61,680 |
| Line NOI | No restriction $900,000 | 20 units restricted $838,320 |
| Line Maximum annual debt service at 1.25x | No restriction $720,000 | 20 units restricted $670,656 |
| Line Loan supported at 6.50%, 30-year amortization | No restriction about $9.49 million | 20 units restricted about $8.84 million |
The restriction costs about $651,000 of proceeds here. To support the same $9.49 million, the restricted case would need a rate near 5.83%, about 67 basis points lower, so ask for the workforce and standard quotes side by side rather than assuming the pricing gain covers the rent. Run your own numbers in the DSCR calculator.
If those 20 units already rent at or below $1,193, the restriction costs no current NOI; the cost becomes rent growth you cannot capture on them. Fannie Mae's 1.20x path needs at least 50% of units restricted at 80% of AMI, restricted rents at least 10% below market, a Strong or Eligible MSA and a repeat sponsor. Restricting 50 units in our example gives up $154,200 a year and supports about $8.19 million even at 1.20x.
Which apartments are a natural fit for a workforce restriction?
The natural fit is an apartment property where a fifth of the units already rent at or below the 80% of AMI ceiling, such as naturally occurring affordable housing, or a property whose affordable regulatory agreement expires during the new loan, because the restriction then costs little current income while the loan qualifies for the programs' pricing incentives.
Fannie Mae's SIA FAQ gives three examples: naturally occurring affordable housing keeping existing units affordable; market-rate properties expecting a future tax abatement or rent restriction incentive; and affordable properties whose regulatory agreement expires during the loan term. Freddie Mac's sheet covers regulatory agreements expiring in the first half of the loan term: the borrower preserves at least 20% of units at the expiring agreement's levels for the rest of the term.
Rent control is a gate. Fannie Mae's SIA FAQ says SIA cannot be used on a property under government-imposed rent control that prohibits vacancy decontrol, and can be used where vacancy decontrol is permitted. A value-add plan that needs every unit at market rent is the weakest fit. For how restricted rents change underwriting more broadly, see how restricted affordable rents affect apartment financing.
How do you get a workforce housing apartment loan placed?
Start with a commercial mortgage brokerage that prices the same rent roll as a workforce loan and as a standard loan across both agencies, because the right answer turns on which units you restrict, at which AMI level, and whether the pricing gain outweighs the rent you give up over the restriction period.
Brokerage option first: YieldStack. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Software matches the deal against 20,000+ loan programs and compares the options; human brokers structure the deal, negotiate on the borrower's side and carry it toward closing. YieldStack reports a median first offer in under an hour, from an institutional lender. 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.
Going direct to one agency lender gets you that lender's read of its programs. Either way, use Fannie Mae's structure: its SIA FAQ says the lender must submit at least two loan options in DUS Gateway, one tagged SIA and one without, so ask to see both priced. Background on agency execution is on the agency loans page and in our guide to agency multifamily lenders.
The package that gets clean workforce quotes carries:
- Rent roll by unit, with bedroom count and whether tenants pay utilities
- The property's census tract, for the AMI lookup
- Which units you would restrict, spread across the property and bedroom sizes
- Any regulatory agreement or tax abatement on the property, with its expiry date
- Local rent control rules and whether vacancy decontrol applies
- Target loan amount, term and hold period
When it is ready, send the workforce housing deal for review.
The bottom line
An apartment qualifies as workforce housing for Fannie Mae or Freddie Mac when at least 20% of its units carry rents affordable at 80% of AMI, higher in costlier markets under SDW and Freddie Mac, written into the loan documents for the loan term or, at Freddie Mac, the shorter of the term or 10 years. Those loans sit outside the $88 billion 2026 cap on each Enterprise. Price the restriction against the rent you give up, unit by unit, before you lock.