Updated July 21, 2026
Agency debt is a multifamily loan originated through Fannie Mae's DUS or Freddie Mac's Optigo programs — non-recourse, fixed-rate, up to 80% LTV, terms out to 30 years, and fully assumable, making it the default takeout financing for stabilized LA apartment buildings.
Both agencies underwrite to roughly 1.20–1.25x minimum DSCR and require the property to demonstrate real, in-place occupancy (typically 85%+ physical) before closing — which is why agency debt is a permanent/stabilized loan, not an acquisition tool for a value-add or lease-up deal. Because it's assumable, a well-priced agency loan already in place is itself a real asset a seller can market.
For LA multifamily sellers, an existing assumable agency loan at a rate meaningfully below current market is a genuine selling point worth highlighting up front — buyers actively search for exactly this. For buyers, agency debt is usually the benchmark permanent-financing cost against which every other loan option gets measured.
From the Sterman LA Multifamily Glossary — defined the way a broker actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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