Multifamily Fraud Cases Drop at Fannie Mae

Drop in Multifamily Fraud Reports

Fannie Mae has reported a significant decline in multifamily mortgage fraud tips and investigations after a major spike in 2024. The Real Deal reports that the agency’s latest update, based on findings from the Federal Housing Finance Agency’s Office of Inspector General, shows reports fell to their lowest levels in a year by July 2025. This follows a wave of 193 investigations and 87 confirmed fraud cases just the previous year.

Industry Scepticism Grows

Despite the falling numbers at Fannie Mae, some market observers doubt that multifamily fraud is actually fading. Experts point to ongoing pressures in the apartment sector, with tighter Fannie scrutiny possibly driving bad actors to other markets such as CMBS. Public disclosures from lenders like Walker & Dunlop and Merchants Bank of Indiana indicate fraud issues persist industry-wide.

Crackdown and Reforms at Fannie Mae

In response to the 2024 surge, Fannie Mae increased appraisal requirements, expanded review teams, and imposed stricter penalties—including loan repurchases and sanctions against lenders. These measures aimed to tighten oversight and deter misconduct in the multifamily mortgage sector. The reforms followed allegations that the agency was exposed to hundreds of millions in questionable loans, further intensifying pressure to restore investor confidence.

Executive Turnover Amid Policy Shifts

The efforts to address multifamily fraud occurred alongside major changes at Fannie Mae and its regulator. 2025 saw new leadership at both Fannie and Freddie Mac, with a reshuffling of boards and senior management, particularly in the multifamily division. Analysts caution, however, that ongoing market stress could see fraud risks re-emerge in other segments even as agency reports decline.