Permanent (Agency) Loan

A permanent loan is long-term, stabilized financing — typically 5 to 30 years — placed on an income-producing property once it has reached consistent occupancy and cash flow. Agency permanent loans (through Fannie Mae or Freddie Mac multifamily programs) offer the lowest rates and highest leverage available in commercial real estate, generally requiring DSCR of 1.25x or higher and LTV at or below 75–80%.

Permanent loans are the destination financing for most stabilized commercial and multifamily assets — the loan a bridge or construction loan is designed to be replaced by once the property's business plan is executed. Because the income stream is proven rather than projected, permanent lenders can underwrite conservatively to trailing financials and offer meaningfully better pricing and leverage than transitional debt.

Agency lenders (Fannie Mae and Freddie Mac, operating through approved correspondent lenders) dominate the permanent multifamily space and offer some of the most borrower-friendly terms available: long fixed-rate periods, non-recourse structures, and prepayment options like yield maintenance or defeasance. Life insurance companies, banks, and CMBS conduits also compete for permanent loans on multifamily, office, retail, and industrial assets, each with different appetite by property type, geography, and loan size.

Qualifying for a permanent loan generally requires the property to show at least several months (often 90 days to a full trailing-12) of stabilized occupancy and income at or above the levels needed to clear the lender's DSCR and debt yield tests.

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