Berkadia's New 'One-Stop' Financing Tackles Multifamily Capital Gap

NEW YORK, NY – April 14, 2026 – Berkadia, a dominant force in commercial real estate finance, has launched a proprietary preferred equity offering, integrating it directly with its own-originated Freddie Mac Conventional loans. The move creates a streamlined, "one-stop-shop" for multifamily investors and developers, allowing them to secure both senior debt and gap financing from a single source.

The announcement positions the firm to more effectively address the capital challenges facing borrowers in a high-interest-rate environment. By combining these two crucial layers of the capital stack, Berkadia aims to simplify complex transactions and accelerate the financing process for properties nationwide.

“Berkadia’s decades-long relationship with Freddie Mac has allowed us to consistently deliver customized, flexible financing solutions for our clients,” said Mike Cale, SVP – Capital Markets, in a statement. “With this new offering, sponsors can now turn to Berkadia for both the senior loan and preferred equity behind a Freddie loan, accessing the full capital stack through a single, integrated platform.”

The new offering is available immediately for eligible borrowers, with preferred equity amounts starting at $5 million on a fixed-rate basis. Proceeds can be used for acquisitions or refinances across a range of property types, including standard multifamily, student housing, manufactured housing communities, and affordable housing.

The New Capital Stack: Preferred Equity's Rising Role

Berkadia's initiative comes at a critical time for the multifamily market. As the Federal Reserve has maintained higher interest rates to manage inflation, senior lenders have tightened their underwriting standards. This has resulted in lower loan-to-value (LTV) ratios, often capping senior loans at 60-65% of a property's value, a significant drop from the 75-80% levels seen in previous years. This creates a "capital gap" that sponsors must fill to complete a transaction.

This is where preferred equity has become an indispensable tool. Positioned between senior debt and common equity, preferred equity acts as a hybrid instrument. While it is an equity investment, it functions similarly to debt by offering investors a fixed, priority return. In case of a default, preferred equity holders are paid after the senior lender but before the common equity holders, giving them a safer position than the project's primary sponsors.

Unlike mezzanine debt, which is structured as a separate loan and often prohibited by agency lenders, preferred equity is structured as an ownership stake. This makes it more palatable to Government-Sponsored Enterprises (GSEs) like Freddie Mac, which have established frameworks to accommodate it. For borrowers, it offers a way to increase leverage without the complexities of securing a subordinate loan or diluting their common equity position excessively. The demand for this type of capital is further fueled by a wave of loan maturities, with hundreds of billions of dollars in multifamily debt originated in a lower-rate environment coming due in 2024 and 2025. Many of these properties will require fresh equity injections to qualify for refinancing at today's rates.

A Streamlined Solution in a Complex Market

The primary advantage of Berkadia's new model is its efficiency. Traditionally, a borrower securing a Freddie Mac loan would need to engage in a separate, often lengthy, process to find a preferred equity provider. This involved a second round of due diligence, negotiating a separate term sheet, and navigating complex intercreditor agreements to define the rights of the senior lender and the equity investor.

By integrating the two offerings, Berkadia collapses this multi-stage process into a single, cohesive transaction. Borrowers can now work with one team for the entire capital stack, from origination through servicing. This unified approach is expected to reduce administrative burdens, lower transaction costs, and significantly shorten closing timelines—a crucial advantage in a volatile market where timing can make or break a deal.

To qualify, borrowers must first be approved for a Freddie Mac Conventional senior loan. The structure also allows for potential early rate lock and index lock options, subject to Freddie Mac's approval, giving borrowers a tool to mitigate interest rate risk during the underwriting period. This integrated structure provides a clear and predictable path to securing up to 80% or more of the required capital from a single, trusted counterparty.

An Evolving Competitive Landscape

While a significant move, Berkadia is entering a competitive field where other major agency lenders have already established similar offerings. Firms like Arbor, Lument, and Greystone have also rolled out proprietary preferred equity programs designed to pair with Freddie Mac and Fannie Mae loans. This trend reflects a broader market shift and a direct response from Freddie Mac itself through its "Optigo Lender Preferred Equity Investments" program, which encourages its lending partners to provide these solutions.

Berkadia's entry, however, carries substantial weight due to its market-leading position. The Mortgage Bankers Association recognized Berkadia as the top multifamily lender by dollar volume in 2023, and the firm consistently ranks as the #1 Freddie Mac Multifamily Lender. By leveraging its immense scale, deep client relationships, and unparalleled origination volume, Berkadia's "one-stop-shop" is poised to become a formidable force.

The move solidifies its ability to offer end-to-end capital solutions and reinforces its reputation as an innovator in housing finance. For multifamily sponsors, the growing availability of these integrated products from top-tier lenders signals a maturing market for gap financing, providing more options and greater efficiency than ever before.

Strengthening a Strategic Partnership for Housing

This new authorization deepens the already robust partnership between Berkadia and Freddie Mac. By empowering its top lender to offer more comprehensive financing, Freddie Mac advances its mission to provide liquidity, stability, and affordability to the U.S. rental housing market. The availability of integrated preferred equity makes it easier for developers and investors to acquire, rehabilitate, and build housing, ultimately contributing to the nation's housing supply.

In a market defined by uncertainty and capital constraints, the ability to provide reliable and flexible financing is paramount. By filling a critical gap in the capital stack, Berkadia's new offering not only enhances its competitive edge but also serves as a vital mechanism for keeping capital flowing into the multifamily sector. This ensures that projects can move forward, helping to meet the persistent demand for rental housing across the country.