Fannie Mae and Freddie Mac Loans for Dallas Apartment Owners
Terrydale Capital
Sep 28, 2026 14 Min read
Your bridge loan is coming due into the worst rate market since 2007
If you own a DFW apartment property on a floating-rate bridge loan that matures in the next 12 months, the ground shifted under you this month. On September 16 the Federal Reserve raised its target range by a quarter point to 3.75% to 4.00%, its first increase since 2023. The 10-year Treasury, which sets the base for most fixed-rate apartment loans, closed at 5.21% on September 28, close to its highest level since 2007 and more than a full point above where it sat a year ago.
You are not alone in this. Transwestern counts more than $2.0 billion in DFW multifamily loans maturing in the second half of 2026, followed by $1.69 billion in the first quarter of 2027 and $1.46 billion in the second. Every one of those owners will be choosing between the same three doors: a Fannie Mae or Freddie Mac loan, a bank loan, or another bridge loan.
Agency debt is usually the cheapest and longest of the three. But at today's rates it often will not size to your payoff, and that gap is where most refinance plans fall apart. Below we run one realistic DFW refinance through all three options so you can see exactly where each one lands.
Fannie and Freddie have more room to lend in 2026 than they did last year
The Federal Housing Finance Agency set the 2026 multifamily loan purchase cap at $88 billion for each enterprise, or $176 billion combined. That is up from $73 billion each in 2025, a 20.5% increase. FHFA also said it would raise the caps if the market needs it and would not cut them if 2026 volume comes in lighter than projected.
Two details in that release matter more to a Dallas owner than the headline number. First, at least 50% of each enterprise's multifamily business has to be mission-driven affordable housing. Second, loans on workforce housing are excluded from the cap entirely. If your rents already sit at levels affordable to moderate-income renters, you may qualify for mission-driven pricing without changing how you operate the property. Whether a specific rent roll qualifies depends on area median income tests the lender runs, so this is worth asking about early rather than assuming.
The small-loan landscape also changed this year. Freddie Mac folded its Small Balance Loan program into its conventional platform in April, with Freddie saying it is consolidating small loans rather than leaving the space. For owners of 5 to 50 unit properties in Oak Cliff, Garland, or Arlington, that means the Freddie execution you may have used last time looks different now, and Fannie Mae's small loan program deserves a fresh look alongside it.
DFW fundamentals are finally working in your favor
Agency lenders underwrite stabilized properties, so the market's direction matters to how your deal is read. Here the news is good. Cushman & Wakefield reports DFW net absorption of just over 10,800 units in Q2 2026, more than double the prior quarter and the strongest quarter since Q3 2021. Stabilized vacancy improved 30 basis points to 9.6%.
Transwestern's count points the same way: occupancy rose to 93.8% from 93.2%, average rent reached $1,496 a month, and developers expect deliveries to slow to 24,133 units, per CRE Daily's summary of the report. The two firms measure vacancy differently, which is why their numbers do not match. We covered that gap in DFW Apartment Vacancy Depends on Who You Ask. What they agree on is the direction: demand is outrunning new supply.
That matters for underwriting because a lender sizing a 10-year loan wants to believe your occupancy will hold. During the two years of oversupply that preceded this, with new construction concentrated in Frisco, Allen/McKinney, and Denton, that was a harder argument. In Q2 2026 it is an easier one.
One DFW refinance, three loans, run side by side
Take a hypothetical 120-unit Class B property in the Metroplex. It appraises at $15,000,000, produces $900,000 in net operating income, and carries a $10,000,000 bridge loan that matures in six months. That is a 6.0% cap rate and a 66.7% loan-to-value on paper, which looks comfortable. Here is what each lender actually offers once you run the numbers at today's rates.
The rates below are illustrative assumptions for this example, not quotes. The agency rate uses the 10-year Treasury at 5.21% plus a 150 basis point spread. The bank rate assumes a 5-year fixed at 6.90%. The bridge rate assumes SOFR near 3.90%, in line with the 3.90% the Fed now pays on reserve balances, plus a 350 basis point spread. Your actual pricing will depend on the property, your sponsorship, and the day you lock.
| Option | Rate and structure | Sizing test | Max loan | LTV | Annual debt service | Covers $10M payoff? |
|---|---|---|---|---|---|---|
| Fannie or Freddie | 6.71% fixed, 10-yr term, 30-yr amortization, non-recourse | 1.25x DSCR | $9,288,768 | 61.9% | $720,000 | No, $711,232 short |
| Bank | 6.90% fixed, 5-yr term, 25-yr amortization, typically recourse | 1.30x DSCR | $8,236,901 | 54.9% | $692,308 | No, $1,763,099 short |
| New bridge | 7.40% floating, interest-only, 2 to 3 yr term | 70% LTV | $10,500,000 | 70.0% | $777,000 | Yes, with $500,000 left for costs |
What the table is telling you
Notice that the agency loan did not stop at 75% LTV. It stopped at 61.9%. At a 6.71% rate on a 30-year amortization, every dollar borrowed costs about 7.75 cents a year in principal and interest. Divide the $720,000 the property can pay at a 1.25x coverage ratio by 7.75% and you get $9.29 million. The debt service coverage ratio, not the loan-to-value, sets the loan size. That is the single most important thing to understand about agency debt in a 5% Treasury market.
The bank loan comes in even smaller because of the shorter 25-year amortization and a tighter 1.30x coverage test. It also usually requires a personal guarantee and resets in five years, which lands you back in this same decision in 2031.
The bridge loan is the only option that pays off the existing debt without new equity. But the interest alone is $777,000 against $900,000 of NOI, a 1.16x coverage ratio. If SOFR rises another 50 basis points, which the Fed's own projections leave room for, interest climbs to $829,500 and coverage falls to 1.08x. You would be paying for time, and the market is currently charging more for it.
The number that changes the answer
For the agency loan to size to the full $10,000,000 at the same terms, the property needs about $968,900 of NOI, an increase of roughly 7.7%. If a renovation, a utility bill-back program, or simple lease-up of vacant units can get you there within a year, a short bridge extension followed by an agency takeout may beat writing a $711,000 check today. If it cannot, the check is often cheaper than two more years of floating-rate exposure.
When agency debt wins, and when it does not
Agency wins when the property is stabilized, the NOI supports the payoff at a 1.25x coverage ratio, and you plan to hold for at least five to ten years. In that case you get a fixed rate, 30-year amortization, and non-recourse terms that neither a bank nor a bridge lender will match. It also wins when your rents qualify as workforce or mission-driven housing, because those loans sit outside FHFA's cap and can carry better pricing.
Agency loses when occupancy is still climbing or the rent roll has gaps, because the lender underwrites trailing income and will not give you credit for next year's projections. It also loses when you expect to sell or recapitalize within a few years. Agency loans carry prepayment penalties, commonly yield maintenance or defeasance on fixed-rate executions, and those grow more expensive if Treasury yields fall after you lock. Locking at a 5.21% Treasury and selling in year three after rates drop is exactly the scenario that makes yield maintenance hurt. We walk through how those penalties work in Navigating Prepayment Penalties in Commercial Real Estate Investing.
A bank loan makes sense for smaller properties below agency minimums, for owners with a deposit relationship that earns them better pricing, and for deals where a five-year horizon matches the business plan. Bridge makes sense only when there is a specific, dated path to higher NOI. Bridge as a way to wait for rates to fall is a bet, and right now the Fed is signaling the opposite direction.
Start 12 months out, not 90 days out
The worst time to learn your agency loan will be $700,000 short is three weeks before your bridge matures. An agency refinance needs a trailing income history the lender will accept, third-party reports, and time to lock, so the useful work happens well before the maturity date. Our 12-month maturity timeline lays out what to do when.
When we shop a DFW apartment refinance, we run it through Fannie Mae, Freddie Mac, bank, life company, and bridge lenders in our network at the same time, so you see where each one actually sizes before you commit to a path. If your loan comes due in the next year, send us the rent roll and trailing 12 and we will show you your number, including the one that tells you whether to write the check or buy time.
Partner With Terrydale Capital for Your Debt Financing Needs
When it comes to debt financing, understanding the right timing, process, and options is crucial. At Terrydale Capital, we provide a comprehensive range of commercial loan solutions tailored to meet your business's unique needs.
Success!
Product has been created successfully!
Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
