Delegated Underwriting and Servicing (DUS)
DUS is Fannie Mae's multifamily lending program that delegates underwriting authority to approved lender partners who share risk on the loans they originate.
The Delegated Underwriting and Servicing program is Fannie Mae's primary channel for multifamily apartment financing. Under the DUS program, approved lender partners are delegated the authority to underwrite and close multifamily loans on Fannie Mae's behalf. In exchange for this authority, the DUS lender shares in the credit risk of the loans it originates, typically bearing one-third of any loss on a defaulted loan.
This risk-sharing arrangement creates strong incentives for DUS lenders to underwrite carefully and monitor loan performance, including insurance compliance. DUS lenders are responsible for verifying that borrowers maintain insurance coverage that meets Fannie Mae's requirements throughout the life of the loan. These requirements are detailed in the DUS Guide, which specifies minimum coverage types, limits, deductible thresholds, and administrative procedures.
For apartment owners with DUS financing, understanding the insurance requirements is essential because the DUS lender actively monitors compliance. Failure to maintain compliant coverage can trigger lender-placed insurance, which is typically more expensive and less comprehensive than a policy the owner places independently. Owners should review the DUS Guide requirements with their insurance advisor and ensure that every renewal meets or exceeds the specified standards.