Multifamily Agency Debt [Explained] - Part 1 Fannie Mae vs. Freddie Mac

Multifamily Agency Debt [Explained] - Part 1 Fannie Mae vs. Freddie Mac

In this episode, Beau goes over options for financing multifamily properties through agency debt and explains the difference between two federal government agencies, "Fannie Mae" and "Freddie Mac."

What's the difference?

Non-Recourse vs. Recourse

The biggest differentiator between bank and agency multifamily financing is whether the loan is recourse or non-recourse. Fannie Mae and Freddie Mac (agency) loans used to buy or refinance buildings are non-recourse, meaning that the debt is secured only by the loan collateral (i.e., the property). If you default on a non-recourse loan, the lender can only recoup the pledged collateral. They can’t go after your personal assets. One of the biggest benefits of working with non-recourse lenders is that your personal liability is protected.


Multifamily or apartment financing from a bank usually comes in the form of a recourse loan. This means that you and your partners are personally liable for the full loan amount in the event of a default. If the property sale does not cover the loan amount, the lender can go after assets that were not used as loan collateral. Sometimes banks will offer non-recourse refinancing, but the risk is often reflected in a higher interest rate.

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_________________________________________________________________________________________________ About Beau: Beau Eckstein is a real estate entrepreneur, TV personality, and commercial mortgage advisor, specializing in construction financing and multi-family lending.
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