I'm a third year analyst with a private mortgage lender specializing in FHA HUD and FNMA DUS lending. I'm currently considering a career in underwriting, but am curious as to others experience with either FHA, FNMA, or FHLMC underwriting. The obvious difference is the underwriting process with a HUD loan is much longer than Fannie Mae or Freddie Mac.
What are your experiences like? Which do you find more enjoyable/rewarding? Lastly, which GSE do you feel have the most job demand as an underwriter? Thanks in advance for any advice or suggestions that you can offer.
Hey just curious are you considering origination at all or are you dead set on underwriting? With my very limited experience with agency debt I liked Freddie thought Fannie was OK. Don't have much experience with FHA.
I didn't consider it previously, but now it seems worth putting some thought into. I am a little concerned about advancement opportunities and income fluctuations, but I do consider myself to be pretty competitive. Can you tell me a little more about your experience in origination and Freddie?
I was a multifamily underwriter (well, an analyst) at Freddie Mac from 2008 to 2009 (I moved on after a year because I thought Congress was going to shutter the GSEs at any given moment--guess I was wrong about that one!). It was a good experience. Freddie Mac has an awesome campus in McLean, VA, and amazing employee benefits.
Having that work experience on my resume definitely gave me instant credibility in the real estate world. I felt like the pay (at the time) was considerably above market for the analyst position (this is in 2008: $55,000 + 25% bonus, with the bonus almost guaranteed based on the easily reached metrics (keep in mind that production bonuses have been eliminated for underwriting last I checked, but base salaries boosted)).
Getting hired to the GSE's multifamily group is almost as difficult as getting hired by the federal government--it's really, really random. From what I recollect, HR screens the resumes, so your hiring manager may not even get your resume (and HR is never really qualified to determine what a hiring manager might like). And when I was there, EVERYONE at Freddie Mac wanted to get into the multifamily group, so there are a ton of lateral resumes coming into HR. Despite my exact work experience lining up with Fannie Mae job openings, I never once got a call back from Fannie Mae over the years, which shows how incredibly difficult getting hired by a GSE multifamily group is. Realistically, I wouldn't expect even a call back, let alone an interview or getting hired. Best bet is to go to a delegated underwriter, such as Wells Fargo, PNC or Prudential, if you want to do GSE underwriting.
Freddie Mac is a great place to work. If all jobs had the pay, benefits, hours and flexibility that FRE had (has?) then a lot more people would enjoy their work. However, it just wasn't for me. It was the kind of stale place that attracts the personality of those who want to be employed long-term at a single company. Most of the multifamily managers/executives, for example, had been at Freddie Mac for 10+ years. As a result, you could see how stagnate and inflexible the thought processes were in the group. It's hard to describe, but one day at lunch I just thought to myself--is this really where I want to be 10 years from now? It's just kind of a sterile place that doesn't really embrace change (and why would it? The managers never worked anywhere else to learn other best practices).
I just started working with a DUS lender doing underwriting. It is a good environment with pretty good pay, but I was wondering if you could guess what a reasonable salary + bonus expectation would be after 3-4 years of experience.
I honestly don't know anymore. $80s- low $100s with bonuses by year 4, economy allowing, back then. I'm way too far removed from that world at this point, such that I could definitely be peddling wrong information. Sorry. :/
I've heard that Freddie Mac and Fannie Mae provide exceptional training for entry level. It's too bad that hiring is difficult especially with them being in conservatorship (more so for Fannie Mae). Both would be great places to work for.
What was your workload like at Freddie Mac? How many deals did you have to review and recommend for approval annually? What were some of the challenges in your job beside leadership stagnation?
I was at FRE for ~a year. I worked on about $100 million in deals. I actually kept detailed track. Several years later after I had left I bizarrely interviewed for a Freddie Mac job also in multifamily and the interviewer told me I was full of sh*t when I said how much volume I had worked on. I wasn't sure how to argue with an interviewer who was provably wrong, so I just let it go, but it made me look bad.
Work hours were like 37.5 hours per week (the official rate). That was mostly on, other than a few mega deals I assisted on. I think I came in two weekends over the course of 55 (?) weeks I was there.
And to follow up on your specific question, I think Fannie Mae had something like 2 or 3 times the amount of multifamily production as Freddie Mac (Freddie Mac is the younger brother of Fannie Mae and is smaller) so Fannie Mae lenders will generally have more demand for underwriters.
Believe it or not, Freddie did more volume than Fannie last year. First time ever I believe. FHFA has put equal caps for both agencies so not as big of an issue anymore.
I work in multifamily debt production at one of the big boys. I do almost exclusively FNMA/Freddie business. I can't speak to HUD, but it definitely takes the longest.
I've never been an underwriter (though I interact with them daily). As for the job demand, FNMA is likely the most demanding because of the risk sharing. The internal scrutiny by your loan committee will be far greater for any FNMA deals since the committee members might be writing checks if a loan goes bad.
If you're the type of person who likes to work independently then underwriting can be a great career. Regardless its nice addition to your resume and gives you real skills that would hopefully come in handy during a bad downturn.
Happy to answer any other questions
What do you like about working on FNMA deals? What are some things you don't like about working with FNMA? How many deals do you work on average annually? Lastly, what makes someone successful in the FNMA business?
I should add that I'm currently an analyst for FHA multifamily, hence all my questions about FNMA and FHLMC. I'm exploring whether to stay in FHA or transition to Fannie Mae or Freddie Mac.
Considering a career in underwriting? do you mean origination? Why would you want a 'career in underwriting'?... I'm not even sure that exists but it sounds miserable.
Anyways, to actually answer your question a friend of mine started in uw at one of the GSE's and ended up becoming the largest producer in the office. now he works somewhere else. you plateau quickly and there's not a ton of money to be made. I think it's a great place to start and you'll get solid training but beyond that not extremely desirable.
How long did it take him to transition from uw to production? Is that common, because it seems like all the senior uw's have been here for awhile and they aren't expecting to move to the production side.
not sure... You see that a lot, they just keep churning the people underneath. Often you have to start a new office, know somebody in the business, hustle, or just wait and get lucky. there's no set path to go into production. In this case I think a spot opened up and he had some family members that fed the office significant business. He also worked his ass off.
You're not sure a career in underwriting exists? Is that a serious statement? Every FHA, FNMA, and FHLMC shop in America has a team of professional, highly trained underwriting staff. It's actually a pretty great career path. It's not for me (doesn't fit my personality), but it's absolutely a great career path.
Most people use UW as training/stepping stone to somewhere else. I think very few people even identify UW as a potential career path and even few aspire to it.
do you need a NMLS? license for underwriting there?
You have no idea what you are talking about.
What is the salary and commission structure like nowadays for the various dus lenders? I knew someone pre crisis who worked for a non bank dus lender who said he was commission only and made 40 bps or something on a deal
It's completely different for origination/production vs underwriting. I can speak for underwriting:
UW: probably $90k base for a junior UW to $120k-$150k for a Sr underwriter. Bonus of 20%-40%. Analysts prolly base of $50k-$75k with a 20% bonus.
This is at a DUS shop. Underwriters at Fannie/Freddie usually make less than underwriters at DUS shops (but have far better work/life balance). Also - I'm talking about underwriters, not managers or credit officers.
I think VA Tech gave a good summary of everything but if OP or anybody else has any more questions, feel free to message me.
This seems pretty spot-on based on what I'm getting paid for my position and experience level at a DUS shop. Thanks for the info. +1
I know several, if not dozens of career CRE loan underwriters. Some with decades of just U/W experience. I found most start as processors.
what advice would you give to someone going into a multifamily DUS analyst position? (with limited experience)
what would be the best way to learn and reduce the learning curve when first starting?
Were analysts and underwriters laid off or fired during the recession? Are underwriters at FHA firms like Greystone and Hunt generally recession proof jobs?
Definitely not recession proof
In 2009 there were layoffs at GSE, mainly because they panicked and hired like 100+ asset managers who got nothing to do because there weren’t any issue with multifamily collaterals
Not recession proof. Not necessarily recession sensitive either. But production/UW jobs will be sensitive to the market cycle for multifamily, whatever that happens to be.
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