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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.23pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.09pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.36pp
Lean -
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
breaches+3
adversely+2
cyberattacks+2
fraudulent+2
cyberattack+2
Positive rising
gain+1
Risk Factors (Item 1A)
10,059 words
Item 1A. Risk Factors
Investing in our common stock involves risks. You should carefully consider the following risk factors, together with all the other information contained in this Annual Report on Form 10-K, before making an investment decision to purchase our common stock. The realization of any of the following risks could materially and adversely affect our business, prospects, financial condition, results of operations, and the market price and liquidity of our common stock, which could cause you to lose all or a significant part of your investment in our common stock. Some statements in this Annual Report, including statements in the following risk factors, constitute forward-looking statements. See “Forward-Looking Statements” for more information.
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Risks Relating to Our Business
The loss of, changes in, or disruptions to our relationships with the Agencies and institutional investors would adversely affect our ability to originate commercial real estate loans, which would materially and adversely affect us.
Currently, we originate all of our loans held for sale through the Agencies’ programs. We are approved as a Fannie Mae DUS ® lender nationwide, a Fannie Mae Multifamily Small Loan lender, a Freddie Mac Optigo ® lender nationally for Conventional, Seniors Housing, Targeted Affordable Housing and Small Balance Loans, a HUD MAP lender nationwide, a HUD LEAN lender nationally, and a Ginnie Mae issuer. Our status as an approved lender affords us a number of and may be by the applicable Agency at any time. The of such status would, or changes in our relationships could, prevent us from being to originate commercial real estate loans for sale through the particular Agency, which would materially and affect us. It could also result in a of similar approvals from the other Agencies. Additionally, federal budgetary policies also impact our ability to originate loans, particularly if they have a impact on the ability of the Agencies to do business with us. Changes in fiscal, monetary, and budgetary policies and the operating status of the U.S. government are beyond our control, are to predict, and could materially and affect us. During periods of limited or no U.S. government operations, our ability to originate HUD loans may be constrained. The impact that limited or dormant government operations may have on our HUD lending depends on the duration of such impacted operations.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
impairments+25
losses+7
loss+6
fraud+6
unpaid+3
Positive rising
improved+3
regained+3
better+2
stable+2
stabilized+1
MD&A (Item 7)
22,927 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .
The following discussion should be read in conjunction with the historical financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K (“10-K”). The following discussion contains, in addition to historical information, forward-looking statements that include risks and uncertainties. Our actual results may differ materially from those expressed or contemplated in those forward-looking statements as a result of certain factors, including those set forth under the headings “Forward-Looking Statements” and “Risk Factors” elsewhere in this 10-K.
Business
Walker & Dunlop, Inc. is a holding company, and we conduct the majority of our operations through Walker & Dunlop, LLC, our primary operating company. During the fourth quarter of 2025, we granted profit interest awards to certain non-executive employees of Walker & Dunlop, LLC to better align their incentive compensation with our goals. The profit interest awards allocate 15% of the income before taxes of a wholly owned subsidiary to these employees. The wholly owned subsidiary is focused on debt financing transactions closed by these employees and is part of our Capital Markets segment.
We are one of the leading commercial real estate services and finance companies in the United States, with a primary focus on multifamily lending and property sales, commercial real estate debt brokerage, and investment management services. We originate, sell, and service a range of multifamily and other commercial real estate financing products to owners and developers of commercial real estate across the country, provide multifamily property sales brokerage and appraisal services in various regions throughout the United States, and engage in commercial real estate and investment management services focused on debt and equity investments on commercial real estate assets and equity investments in affordable housing. We are a leader in commercial real estate technology, developing and acquiring technology resources that (i) provide solutions and a experience for our customers and (ii) allow us to reach a broader customer base.
We also broker loans on behalf of certain life insurance companies, investment banks, commercial banks, pension funds, CMBS conduits, and other institutional investors that directly underwrite and provide funding for the loans at closing. In cases where we do not fund the loan, we act as a loan broker. If these investors discontinue their relationship with us and replacement investors cannot be found on a timely basis, we could be adversely affected.
A change to the conservatorship of Fannie Mae and Freddie Mac and related actions, along with any changes in laws and regulations affecting the relationship between Fannie Mae and Freddie Mac and the U.S. federal government or the existence of Fannie Mae and Freddie Mac, could materially and adversely affect our business.
Currently, we originate a majority of our loans for sale through the GSEs’ programs. Additionally, a substantial majority of our servicing portfolio represents loans we service through the GSEs’ programs. Changes in the business charters, structure, or existence of one or both of the GSEs could eliminate or substantially reduce the number of loans we originate with the GSEs, which in turn would lead to a reduction in fees related to such loans. These effects would likely cause us to realize significantly lower revenues from our loan originations and servicing fees, and ultimately would have a material adverse impact on our business and financial results.
In September 2008, the GSEs’ regulator, the Federal Housing Finance Agency (the “FHFA”), placed each GSE into conservatorship. The conservatorship is a statutory process designed to preserve and conserve the GSEs’ assets and property and put them in a sound and solvent condition. The conservatorships have no specified termination dates and there continues to be discussions regarding the future form of the GSEs, including how long they will continue to exist in their current forms, the extent of their roles in the housing markets and whether or in what form they may exist following conservatorship.
As the primary regulator and the conservator of the GSEs, the FHFA has taken a number of steps during conservatorship to manage the GSEs’ multifamily business activities. Since 2013, the FHFA has established limits on the volume of new multifamily loans that may be purchased annually by the GSEs (“caps”). In November 2025, the FHFA updated the GSEs’ loan origination caps to $88.0 billion for the four-quarter period beginning January 1, 2026 and ending December 31, 2026, compared to $73.0 billion each for the same period in 2025. The new caps apply to all multifamily business with limited exclusions. The FHFA also maintained the 50.0% target for the GSEs’ multifamily business to be mission-driven, affordable housing. We cannot predict whether FHFA will implement further regulatory and other policy changes that will modify the GSEs’ multifamily businesses.
Congress has considered various housing finance reform bills since the GSEs went into conservatorship in 2008. Several of the bills have called for the winding down or receivership of the GSEs. We expect Congress to continue considering housing finance reform in the future, including conducting hearings and considering legislation that could alter the housing finance system. We cannot predict the prospects for the enactment, timing or content of legislative proposals regarding the future status of the GSEs.
We are subject to risk of loss in connection with defaults on loans, including loans sold under the Fannie Mae DUS program, and could experience significant servicing advance obligations in connection with Fannie Mae and HUD loans we originate, which could materially and adversely affect our results of operations and liquidity.
As a loan servicer, we maintain the primary contact with the borrower throughout the life of the loan and are responsible, pursuant to our servicing agreements with the Agencies and institutional investors, for asset management. We are also responsible, together with the applicable Agency or institutional investor, for taking actions to mitigate losses. Our asset management process may be unsuccessful in identifying loans
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that are in danger of underperforming or defaulting or in taking appropriate action once those loans are identified. Decisions regarding loss mitigation are within the control of the Agencies. Previous turmoil in the real estate, credit and capital markets have made this process even more difficult and unpredictable. When loans become delinquent, we may incur additional expenses in servicing and asset managing the loan and are typically required to advance principal and interest payments and tax and insurance escrow amounts.
All of these items discussed above could have a negative impact on our cash flows. Because of the foregoing, a rise in delinquencies could have a material adverse effect on us. Under the Fannie Mae DUS program, we originate and service multifamily loans for Fannie Mae without having to obtain Fannie Mae's prior approval for certain loans, as long as the loans meet the underwriting guidelines set forth by Fannie Mae. In return for the delegated authority to make loans and the commitment to purchase loans by Fannie Mae, we must maintain minimum collateral and generally are required to share risk of loss on loans sold to Fannie Mae. Under the full risk-sharing formula, we are required to absorb the first 5% of any losses on the UPB of a loan at the time of loss settlement, and above 5% we are required to share the loss with Fannie Mae, with our maximum loss generally capped at 20% of the original unpaid principal balance of a loan. In addition, Fannie Mae can double or triple our risk-sharing obligations if the loan does not meet specific underwriting criteria or if the loan defaults within 12 months of its sale to Fannie Mae. Fannie Mae also requires us to maintain collateral, which may include pledged securities, for our risk-sharing obligations. As of December 31, 2025, we had pledged securities of $225.0 million as collateral against future losses related to $68.6 billion of loans outstanding that are subject to risk-sharing obligations, as more fully described under “Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Quality, Allowance for Risk-Sharing Obligation, and Loan Repurchases” which we refer to as our “at-risk balance.” Fannie Mae collateral requirements may change in the future. As of December 31, 2025, our allowance for risk-sharing as a percentage of the at-risk balance was 0.05%, or $37.5 million, and reflects our current estimate of our future expected payouts under our risk-sharing obligations. Over the past 10 years, we have settled $9.2 million of risk-sharing losses, or 0.2 basis points of the average at-risk balance. We cannot ensure that our estimate of the allowance for risk-sharing obligations will be sufficient to cover future actual write-offs. Other factors may also affect a borrower's decision to default on a loan, such as property, cash flow, occupancy, maintenance needs, and other financing obligations. As of December 31, 2025, 11 at-risk Fannie Mae loans with an aggregate unpaid principal balance of $147.8 million and an aggregate collateral-based reserve of $11.4 million had defaulted and were awaiting ultimate disposition. If loan defaults increase, actual risk-sharing obligation payments under the Fannie Mae DUS program may increase, and such defaults and payments could have a material adverse effect on our results of operations and liquidity. In addition, any failure to pay our share of losses under the Fannie Mae DUS program could result in the revocation of our license from Fannie Mae and the exercise of various remedies available to Fannie Mae under the Fannie Mae DUS program. In limited circumstances we have agreed, and may in the future agree, with Fannie Mae to increase our loss sharing up to 100% of a loan’s UPB in lieu of the risk-sharing agreement described above.
A reduction in the prices paid for our loans and services or an increase in loan or security interest rates required by investors could materially and adversely affect our results of operations.
Our results of operations could be materially and adversely affected if the Agencies or institutional investors lower the price they are willing to pay to us for our loans or services or adversely change the material terms of their loan purchases or service arrangements with us. Multiple factors determine the price we receive for our loans. With respect to Fannie Mae-related originations, our loans are generally sold as Fannie Mae-insured securities to third-party investors. With respect to HUD-related originations, our loans are generally sold as Ginnie Mae securities to third-party investors. In both cases, the price paid to us reflects, in part, the competitive market bidding process for these securities.
We sell loans directly to Freddie Mac. Freddie Mac may choose to hold, sell or later securitize such loans. We believe terms set by Freddie Mac are influenced by similar market factors as those that impact the price of Fannie Mae–insured or Ginnie Mae securities, although the pricing process differs. With respect to loans that are placed with institutional investors, the origination fees that we receive from borrowers are determined through negotiations, competition, and other market conditions.
Loan servicing fees are based, in part, on the risk-sharing obligations associated with the loan and the market pricing of credit risk. The credit risk premium offered by Fannie Mae for new loans can change periodically but remains fixed once we enter into a commitment to sell the loan. Over the past several years, Fannie Mae loan servicing fees have generally been higher than for other products principally due to the market pricing of credit risk. There can be no assurance that such fees will continue to remain at such levels or that such levels will be sufficient if delinquencies occur.
Servicing fees for loans placed with institutional investors are negotiated with each institutional investor pursuant to agreements that we have with them. These fees for new loans vary over time and may be materially and adversely affected by a number of factors, including competitors that may be willing to provide similar services at lower rates.
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Interest rate movements, market volatility, and borrower financing preferences could reduce origination volumes, compress margins, and adversely affect our fee income and servicing assets.
Our revenue is significantly driven by transaction volumes, pricing, and servicing-related income in the multifamily and commercial real estate debt capital markets. Rapid changes in interest rates, sustained elevated rates, yield curve inversions, or increased market volatility may reduce refinancing and transaction activity, delay borrower decision-making, increase borrower payment burdens, and limit the availability of accretive financing alternatives. In addition, these conditions may cause clients to favor floating-rate or shorter-term financing structures, which generally generate lower fees than longer-term or fixed-rate transactions. As a result, origination volumes, margins, gain-on-sale income, fee revenue, and the fair value of mortgage servicing rights may decline or become more volatile, which could materially adversely affect our results of operations and financial condition.
The failure of banks or other major financial institutions, or sustained financial market illiquidity, could adversely affect our and our clients’ businesses and results of operations.
The failure of certain financial institutions may increase the possibility of a sustained deterioration of financial market liquidity. The failure of a bank (or banks) with which we and/or our clients have a commercial relationship could adversely affect, among other things, our and/or our clients’ ability to pursue key initiatives, including by affecting our ability to borrow from financial institutions on favorable terms. In the event our client has a commercial relationship with a bank that has failed or is otherwise distressed, such client may experience delays or other issues in meeting certain debt service, other funding or credit support obligations or consummating transactions with us. Additionally, if a client has a commercial relationship with a bank that has failed or is otherwise distressed, the client or sponsor may experience issues receiving financial assistance to support their operations or consummate transactions, to the detriment of their business, financial condition and/or results of operations, which, in turn, may have a material adverse effect on our business, results of operations, liquidity, or financial condition.
A significant portion of our revenue is derived from loan servicing fees, and declines in or terminations of servicing engagements or breaches of servicing agreements could have a material adverse effect on us.
We expect that loan servicing fees will continue to constitute a significant portion of our revenues for the foreseeable future. Nearly all of these fees are derived from loans that we originate and sell through the Agencies’ programs or place with institutional investors. A decline in the number or value of loans that we originate for these investors or terminations of our servicing engagements will decrease these fees. HUD has the right to terminate our current servicing engagements for cause. In addition to termination for cause, Fannie Mae and Freddie Mac may terminate our servicing engagements without cause by paying a termination fee. Our institutional investors typically may terminate our servicing engagements at any time with or without cause, without paying a termination fee. We are also subject to losses that may arise from servicing errors, such as a failure to maintain insurance, pay taxes, or provide notices.
If a significant number of our loan warehouse facilities, on which we are highly dependent, are terminated or reduced, we may be unable to find replacement financing on favorable terms, or at all, which would have a material adverse effect on us.
We require a significant amount of short-term funding capacity to finance Agency loans we originate. As of December 31, 2025, we had $3.8 billion of committed and uncommitted loan funding available through five commercial banks and $1.5 billion of uncommitted funding available through Fannie Mae’s As Soon As Pooled program. Additionally, consistent with industry practice, our existing loan warehouse facilities have terms of one year and therefore require annual renewal. If a significant number of our committed facilities are reduced, terminated, or are not renewed or our uncommitted facilities are not honored, we may be unable to find replacement financing on favorable terms, or at all, and we might not be able to originate loans, which would have a material adverse effect on us. Additionally, as our business continues to expand, we may need additional warehouse funding capacity for loans we originate. There can be no assurance that, in the future, we will be able to obtain additional warehouse funding capacity on favorable terms, on a timely basis, or at all.
If we fail to meet or satisfy any of the financial or other covenants included in our warehouse facilities, we would be in default under one or more of these facilities and our lenders could elect to declare all amounts outstanding under the facilities to be immediately due and payable, enforce their interests against loans pledged under such facilities and/or restrict our ability to make additional borrowings. These facilities also contain cross-default provisions, such that if a default occurs under any of our debt agreements, generally the lenders under our other debt agreements could also declare a default. These restrictions (and restrictions included in our long-term debt agreement) may interfere with our ability to obtain financing or to engage in other business activities, which could materially and adversely affect us. There can be no assurance that we will maintain compliance with all financial and other covenants included in our loan warehouse facilities in the future.
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We have been, and in the future may be, required to repurchase loans or indemnify loan purchasers due to breaches of representations or warranties we have made, either as a result of our actions or based on information provided to us by borrowers or third parties in connection with the sale of loans to third parties, including through the Agencies’ programs, which could have a material adverse effect on us.
We must make certain representations and warranties concerning each loan originated by us for the Agencies’ programs. The representations and warranties relate to our practices in the origination and servicing of the loans and the accuracy of the information being provided by us. For example, we are generally required to provide, among others, the following representations and warranties: we are authorized to do business and to sell or assign the loan; the loan conforms to the requirements of the Agencies (including with respect to property conditions and the financial performance of the property) and certain laws and regulations; the underlying mortgage represents a valid lien on the property and there are no other liens on the property; the loan documents are valid and enforceable; taxes, assessments, insurance premiums, rents and similar other payments have been paid or escrowed; the property is insured, conforms to zoning laws and remains intact; there is not any act or omission of which we, in the exercise of reasonable diligence should have been aware; and we do not know of any issues regarding the loan that are reasonably expected to cause the loan to be delinquent or unacceptable for investment or adversely affect its value. Many of the representations and warranties we are required to make are based on information provided to us by borrowers or third parties and there is a risk that these representations and warranties may be breached, either inadvertently or due to unforeseen circumstances, including inaccurate, incomplete or fraudulent information provided by borrowers or third parties, errors in documentation, changes in program guidelines, or changes in the regulatory environment. We have in the past been and may in the future be required to repurchase loans or indemnify loan purchasers in connection with inaccurate, incomplete, or fraudulent information provided by borrowers or third parties or other breaches of representations and warranties. We are permitted to satisfy certain of these representations and warranties by furnishing a title insurance policy. Given the inherent risks associated with loan origination and servicing activities, particularly in highly-regulated programs such as Fannie Mae DUS and Freddie Mac Optigo, we maintain underwriting and due diligence processes, compliance procedures, and risk mitigation measures to minimize the likelihood of breaches, though such measures may not always be complied with by our personnel or fully effective in mitigating all risks, especially in the case of breaches tied to the actions of borrowers or third parties, from whom recovery may be limited.
In the event of a breach of any representation or warranty concerning a loan, investors could, among other things, require us to repurchase the full amount of the loan and/or seek indemnification for losses from us, or, for Fannie Mae DUS loans, increase the level of risk-sharing on the loan up to 100% of the unpaid principal balance of the loan. Our obligation to repurchase the loan is independent of our risk-sharing obligations. The Agencies could require us to repurchase the loan if representations and warranties are breached, even if the loan is not in default. Because the accuracy of many such representations and warranties generally is based on our actions or on third-party reports, such as title reports and environmental reports, we may not receive similar representations and warranties from other parties that would serve as a claim against them. Even if we receive representations and warranties from third parties and have a claim against them, in the event of a breach, our ability to recover on any such claim may be limited. Our ability to recover against a borrower that breaches its representations and warranties to us may be similarly limited.
In total, we have been required, or expect to be required, to repurchase or provide indemnification for $221.6 million of loans over the last two years, and we incurred $40.9 million of indemnified and repurchased loan expenses for the year ended December 31, 2025 in connection with these indemnified and repurchased loans. For example, in 2025, we received loan repurchase requests from Freddie Mac for two portfolios of loans with an aggregate unpaid principal balance of $100.0 million. An internal investigation into the origination of the two portfolios of loans revealed fraudulent borrower activity, including undisclosed flip transactions involving concealed lower sale prices and inflated purchase and sale agreements used to establish a higher price for the loans. W hile investigating the loans, we determined that certain of our employees had not adhered to our loan origination policies and procedures. These employees are no longer at the Company. As of December 31, 2025, we have agreed to indemnify Freddie Mac for one of the portfolios. In the first quarter of 2026, we completed this internal investigation, reported our findings to Freddie Mac and Fannie Mae and are negotiating the terms for the other portfolio. We are continuing to engage with the GSEs regarding loans originated by the former employees. In total, these former employees originated $194.6 million of the loans repurchased over the last two years. The scope, timing, and outcome of these engagements remain uncertain, and additional developments could result in additional repurchases, indemnities, expenses or other negative impacts.
Our ability to recover on a claim against any party would also be dependent, in part, upon the financial condition and liquidity of such party. There can be no assurance that we, our employees or third parties will not make mistakes that would subject us to repurchase or indemnification obligations. A significant amount of repurchase or indemnification obligations imposed on us could have a material adverse effect on us and increase our liquidity needs.
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We own and operate multifamily properties as a result of foreclosures or other acquisitions that involve risks that could adversely affect our business and financial results.
We have taken possession of and own a limited number of multifamily properties that we obtained through foreclosures or other acquisitions and may foreclose on additional properties in the future in the ordinary course of our business. The ownership and operation of these properties involves risks, including the risk that the property will not perform as anticipated and that any actual costs for rehabilitation, repositioning, renovation and improvements will exceed estimates. When we take possession of a property, we may face risks associated with entering a new market such as a lack of market knowledge or understanding of the local economy, forging new business relationships in the area and unfamiliarity with local government and permitting procedures as well as environmental risks associated with owning such properties. The properties may be subject to liabilities, including tax liabilities, which may be without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based on our ownership of any of these properties, then we may have to pay substantial sums to settle it.
We have made various investments that are funded with corporate capital. These investments may involve a greater risk of loss than our traditional real estate lending activities.
We use corporate capital to make investments in (i) joint ventures and other equity method investments, (ii) loans to our LIHTC joint venture development partners, (iii) investments in LIHTC equity funds, and (iv) co-investments in funds managed by our registered investment adviser.
Joint ventures and other equity method investments
We make investments in various joint ventures, including investments in various venture capital funds with a specific focus on identifying and investing in property technology and financial technology companies with a predominant focus on the housing and commercial real estate sectors. We bear the risk that these investments will not be able to generate sufficient cash flows for us to fully recover our capital contributions. These investments are included in Other assets on the Consolidated Balance Sheets.
Loans to our LIHTC joint venture partners
To provide capital support to the partners in our LIHTC joint ventures, who are the developers of LIHTC properties, we provide loans to these partners. The funds from these loans are used to prepare a property for development and ultimately to be syndicated into a LIHTC fund. These loans are generally short-term and repaid with proceeds from the operation of the properties, construction loans or permanent loans from third-party sources or proceeds from the sale of equity to LIHTC funds. We face risk that these loans to our joint venture partners may not be repaid if the cash flow from operations is not sufficient to repay the loans, loans from third parties cannot be obtained, the equity in the property is not sold to a LIHTC fund, or the value of the equity in the underlying property is sufficient.
(iii) Investments in LIHTC equity funds
We acquire interests in tax credit property partnerships for sale to LIHTC investment funds and, at any point in time, the aggregate amount of funds advanced can be material. Recovery of these investments is subject to our ability to attract investors to new investment funds.
We have contractual obligations that will require significant uses of capital. Our ability to fund these uses of capital is dependent on both our results of operations and our ability to access capital markets. A decline in the results of our operations, an inability to access capital markets, or an increase in the cost of capital may materially affect our operations.
As discussed in “ Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources ,” we have made commitments to fund (i) equity-method investments and (ii) investments in affordable housing partnerships to be syndicated into LIHTC investment funds, and we also must satisfy collateral requirements for our Fannie Mae DUS risk-sharing obligations and the operational liquidity requirements of Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders. To fund these cash flow obligations along with any obligations we may have related to loan repurchases, we typically use cash generated from our operations and, when necessary, from funds raised in the capital markets. A significant decline in our operational performance, an inability to access capital markets for funding, or a sharp rise in our cost of capital could adversely affect our ability to meet these future obligations.
We are dependent upon the success of the multifamily real estate sector, and conditions that negatively impact the multifamily sector may reduce demand for our products and services and materially and adversely affect us.
We provide commercial real estate financial products and services primarily to developers and owners of multifamily properties. Accordingly, the success of our business is closely tied to the overall success of the multifamily real estate market. Various changes in real
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estate conditions may impact the multifamily sector. Any negative trends in such real estate conditions may reduce demand for our products and services and, as a result, adversely affect our results of operations. These conditions include:
an oversupply of, or a reduction in demand for, multifamily housing;
a change in policy or circumstances that may result in a significant number of current and/or potential residents of multifamily properties deciding to purchase homes instead of renting;
rent control, rent forbearance, or stabilization laws, or other laws regulating multifamily housing, which could affect the profitability or values of multifamily developments;
the inability of residents and tenants to pay rent;
changes in the tax code related to investment real estate;
increased competition in the multifamily sector based on considerations such as the attractiveness, location, rental rates, amenities, and safety record of various properties; and
increased operating costs, including increased real property taxes, maintenance, insurance, and utilities costs.
Moreover, other factors may adversely affect the multifamily sector, including inflation, political and geographical instability, trade tensions, including the recent tariffs imposed by the United States and retaliatory tariffs by other countries, fluctuations in the real estate and debt capital markets, changes in government fiscal and monetary policies, regulations and other laws, rules and regulations governing real estate, zoning or taxes, changes in interest rate levels, the potential liability under environmental and other laws, and other unforeseen events. Any or all of these factors could negatively impact the multifamily sector and, as a result, reduce the demand for our products and services. Any such reduction could materially and adversely affect us.
The loss of our Chairman and Chief Executive Officer could result in a material adverse effect on our business and results of operations.
Our future success depends to a significant extent on the continued services of William Walker, our Chairman and Chief Executive Officer. The loss of the services of our Chairman and Chief Executive Officer could have a material adverse effect on our business and results of operations. We maintain “key person” life insurance on Mr. Walker, and the insurance proceeds from such insurance may be insufficient to cover the cost associated with recruiting a new Chief Executive Officer.
We intend to drive a significant portion of our future growth through additional strategic acquisitions or investments in new markets, new ventures and new lines of business. If we do not successfully identify, complete and integrate such acquisitions or investments, our growth may be limited. Additionally, expansion of our business domestically or internationally may place significant demands on our administrative, operational, and financial resources, and the acquired businesses or new ventures may not perform as we expect them to or become profitable.
We intend to pursue continued growth by acquiring or starting complementary businesses, but we cannot guarantee such efforts will be successful or profitable. Our future success depends, in part, on our ability to expand or modify our business in response to changing client demands and competitive pressures. In some circumstances, we may determine to do so through the acquisition of complementary businesses or investments in new ventures rather than through internal growth.
We do not know whether the favorable conditions that have enabled our past growth through acquisitions and strategic investments will continue. The identification of suitable acquisition candidates and new ventures can be difficult, time consuming and costly, and we may not be able to successfully complete identified acquisitions or investments in new ventures on favorable terms, or at all.
In addition, if our growth continues, it could increase our expenses and place additional demands on our management, personnel, information systems, and other resources. Sustaining our growth could require us to commit additional management, operational and financial resources to maintain appropriate operational and financial systems to adequately support expansion. Acquisitions or new investments also typically involve significant costs related to integrating information technology, accounting, reporting, and management services and rationalizing personnel levels and may require significant time to obtain new or updated regulatory approvals from the Agencies and other federal and state authorities. Negative impacts of acquisitions or investments in new markets, new ventures, and new lines of business that could have a material and adverse effect on us include diversion of management's attention from the regular operations of our business and potential loss of our key personnel, inability to hire and retain qualified bankers and brokers, and inability to achieve the anticipated benefits of the acquisitions or new investments. There can be no assurance that we will be able to manage any growth effectively and any failure to do so could adversely affect our ability to generate revenue and control our expenses, which could materially and adversely affect us. In addition, future acquisitions or new investments could result in significantly dilutive issuances of equity securities or the incurrence of substantial debt, contingent liabilities, or expenses or other charges, which could also materially and adversely affect us.
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In addition, we must manage the potential conflicts between locally accepted business practices in any given jurisdiction and our obligations to comply with laws and regulations, including anti-corruption laws or regulations applicable to us, such as the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010. We must also manage our obligations to comply with laws and regulations related to trade restrictions, and sanctions, including regulations established by the U.S. Office of Foreign Assets Control. Government agencies and authorities have a broad range of civil and criminalpenalties they may seek to impose against companies for violations of anti-corruption laws or regulations, trade restrictions, sanctions, and other laws, rules, and regulations.
If we are unable to successfully identify, complete and integrate acquisitions or investments or manage the complexity of our global operations successfully, our financial results could be adversely affected. We also may be required to or elect to cease or modify our operations or the offering of our products and services in certain regions, including as a result of the risks described above, which could adversely affect our business and financial results.
There is a risk of unfavorable changes to, or elimination of governmental programs that could limit the product offerings of our affordable housing real estate services.
As discussed above under Part I, Item 1. Business “Our Business—Affordable Housing Real Estate Services,” our affordable housing real estate service derives revenue from the syndication of partnership interests in properties eligible for low-income housing tax credits, or LIHTCs. Congress could repeal or modify the LIHTC provisions at any time or modify the tax laws so that the value of LIHTC benefits is reduced. If the LIHTC provisions are repealed or adversely modified, the results of operations of our Affordable Housing Real Estate Services would be materially adversely affected.
Our role as a sponsor of investment funds and co-developer of affordable properties exposes us to risks of loss.
In connection with the sponsorship of investment funds, we act as a fiduciary to the investors in our investment funds and could be liable in connection with our actions as a fiduciary. We could also be liable to investors in investment funds and third parties as a result of serving as general partner or special limited partner in various investment funds.
As a co-developer of affordable housing properties, we are exposed to development risks associated with the construction and lease-up of affordable housing properties. A failed project could result in financial and liquidity exposure to us for the completion of the project or the disposition of the project at a loss.
Noncompliance with various requirements by the affordable housing partnerships could impair our investors’ right to LIHTCs and have a negative impact on our business.
The ability of investors in tax credit equity funds we sponsor to benefit from LIHTCs requires that the partnerships in which those funds invest operate affordable housing projects in compliance with a number of requirements in the Tax Code and the regulations thereunder. The loss of tax benefits could result under applicable laws if, among other things, the property is not occupied by a minimum percentage of residents whose income falls below specified levels, the level of rent charged to certain residents exceeds certain limits, or the fund's investment in the property is terminated through a sale or foreclosure of the property under certain circumstances. Failure to comply continuously with these requirements throughout a 15-year compliance period could result in loss of the right to those LIHTCs, including recapture of credits that were already taken. While we have no direct liability for such foregone credits, our prospective business and reputation could be negatively impacted by significant and repeated recapture of credits.
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We maintain cash deposits in excess of federally insured limits. Adverse developments affecting systematically important financial institutions, including bank failures, could adversely affect our liquidity and financial performance.
We maintain substantially all of our cash and cash equivalents in domestic cash deposits in systematically important financial institutions, which are Federal Deposit Insurance Corporation (“FDIC”) insured banks, and certain of our cash deposits exceed FDIC insurance limits. Market conditions can impact the viability of these institutions, and bank failures, events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, or concerns or rumors about such events, may lead to liquidity constraints. The failure of a bank, or other adverse conditions in the financial or credit markets impacting financial institutions at which we maintain balances, could adversely impact our liquidity and financial performance. There can be no assurance that our deposits in excess of FDIC insurance limits will be backstopped by the U.S. government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, or government institutions, or by acquisition in the event of a failure or liquidity crisis.
We are subject to various risks associated with climate change and other ESG matters.
There is increased scrutiny from investors, customers, policymakers, and other stakeholders regarding companies’ management of climate change, human capital, and various other ESG matters. For example, there are inherent environmental risks wherever business is conducted. Various events, such as floods, fires, or storms, could interrupt our operations or damage properties we have interests in. Climate change and other environmental pressures may increase the frequency or intensity of such events, as well as contribute to chronic changes (such as sea level rise or changes in meteorological or hydrological patterns) that may result in similar risks. Various actions by society to mitigate or adapt to such phenomena may also result in additional risks, including changes to the desirability of markets where we operate. For example, various regulators (such as California and the European Union) have adopted or are considering adopting requirements for companies to undertake disclosures or actions on climate- and other ESG-related matters. These regulations are not uniform, and may not be interpreted or applied uniformly, which may increase the cost and complexity of compliance, along with any associated risks.
While we engage in various initiatives to manage ESG matters and address related stakeholder expectations, such initiatives can be costly and may not have the desired effect. For example, many of our initiatives leverage methodologies, standards, and data that are complex and continue to evolve. As with other companies, our approach to such matters also evolves, and we cannot guarantee that our approach will align with the expectations or preferences of any particular stakeholder. Moreover, stakeholder expectations vary and at times conflict. Proponents and opponents of such matters are increasingly resorting to activism, including litigation, to advance their perspectives. Addressing stakeholder expectations or requirements entails costs, and any failure to successfully navigate such expectations, as well as evolving interpretations of any existing governmental laws or requirements, may result in reputational harm, loss of customers, regulatory or investor engagement, or other adverse impacts to our business.
Risks Relating to Regulatory Matters
If we fail to comply with the numerous government regulations and program requirements of the Agencies, we may lose our approved lender status with these entities and fail to gain additional approvals or licenses for our business. We are also subject to changes in laws, regulations and existing Agency program requirements, including with regard to underwriting and asset management requirements and potential increases in reserve and risk retention requirements that could increase our costs and affect the way we conduct our business, which could materially and adversely affect us.
Our operations are subject to regulation by federal, state, and local government authorities, various laws and judicial and administrative decisions, and regulations and policies of the Agencies. These laws, regulations, rules, and policies impose, among other things, minimum net worth, operational liquidity and collateral requirements. Fannie Mae requires us to maintain operational liquidity based on a formula that considers the balance of the loan and the level of credit loss exposure (level of risk-sharing). Fannie Mae requires us to maintain collateral, which may include pledged securities, for our risk-sharing obligations. The amount of collateral required under the Fannie Mae DUS program is calculated at the loan level and is based on the balance of the loan, the level of risk-sharing, the seasoning of the loan, and our rating.
Regulatory authorities also require us to submit financial reports and to maintain a quality control plan for the underwriting, origination and servicing of loans. Numerous laws and regulations also impose qualification and licensing obligations on us and impose requirements and restrictions affecting, among other things: our loan originations; maximum interest rates, finance charges and other fees that we may charge; disclosures to consumers; the terms of secured transactions; debt collection; personnel qualifications; and other trade practices. We also are subject to inspection by the Agencies and regulatory authorities and the regulations and guidelines promulgated by the Agencies are subject to change in the Agencies’ discretion. For example, during 2025, the GSEs implemented many significant changes to their multifamily program requirements applicable to us . Our failure to comply with these requirements could lead to, among other things, the loss of a license as an approved Agency lender, the inability to gain additional approvals or licenses, the termination of contractual rights without compensation, demands for indemnification or loan repurchases, class action lawsuits and administrative enforcement actions.
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As a registered broker-dealer, one of our subsidiaries is subject to extensive regulation that exposes us to a variety of risks associated with the securities industry.
Broker-dealer and other financial services firms are subject to extensive regulatory requirements under federal and state laws and regulations and self-regulatory organization (“SRO”) rules. One of our subsidiary entities, Zelman Partners, LLC (“Zelman Partners”) is registered with the SEC as a broker-dealer under the Exchange Act and in the states in which Zelman Partners conducts securities business and is a member of FINRA and other SROs. Zelman Partners is subject to regulation, examination and disciplinary action by the SEC, FINRA and state securities regulators, as well as other governmental authorities and SROs with which Zelman Partners is registered or licensed or of which Zelman Partners is a member.
The regulations applicable to broker-dealers depend in part on the nature of the business conducted by the broker-dealer, and generally cover all aspects of the securities business, including, among other things, sales practices, fee arrangements, disclosures to clients, capital adequacy, use and safekeeping of clients’ funds and securities, recordkeeping and reporting and the qualification and conduct of officers, employees and independent contractors. As part of this regulatory scheme, broker-dealers are subject to regular and special examinations by the SEC and FINRA intended to determine their compliance with securities laws, regulations and rules. Following an examination’s conclusion, a broker-dealer may receive a deficiency letter identifying potential compliance or supervisory weaknesses or rule violations which the firm must address. Any such proceeding against Zelman Partners, or any of its associated persons, could harm our reputation, cause us to lose clients or fail to gain new clients and have a material adverse effect on our business.
Our ability to comply with applicable laws, rules and regulations will be largely dependent on our establishment and maintenance of compliance, supervision, recordkeeping and reporting and audit systems and procedures, as well as our ability to attract and retain qualified compliance, audit and risk management personnel. While we have adopted policies and procedures we believe are reasonably designed to comply with applicable laws, rules and regulations, these systems and procedures may not be fully effective, and there can be no assurance that regulators or third parties will not raise material issues with respect to our past or future compliance with applicable regulations.
If we fail to comply with laws, regulations and market standards regarding the privacy, use, and security of customer information, or if we are the target of a successfulcyberattack, we may be subject to legal and regulatory actions and our reputation would be harmed.
We rely on hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business (collectively, “IT Systems”). We own and manage certain IT Systems but also rely on third parties for a range of IT Systems and related products and services, such as cloud computing. We also receive, maintain, and store non-public personal information of our customers as well as proprietary business data. The technology and other controls and processes designed to secure our IT Systems and information and to prevent, detect, and remedy any unauthorized access to that information were designed to obtain reasonable, not absolute, assurance that any unauthorized access is identified and addressed appropriately. We, and our service providers, are regularly subject to and expect to continue to experience cyberattacks that are increasingly sophisticated (including using artificial intelligence), that are often designed to evade detection, and/or that seek to damage or disrupt our network, as well as those of our service providers, and other information systems. Certain of these cyberattacks, including phishing attacks, have resulted in unauthorized access by third parties to information that we receive, maintain and store in the course of our business. Although no cyberattacks to date resulted in material financial impacts or disruptions to our business, given the accelerating scope, sophistication, and frequency of cyberattacks, there can be no assurance that the cybersecurity incidents we have experienced or any future incident will not materially impact our security, operations and financial results. Future cyberattacks that impact our IT Systems or information, could result in a loss of data, operational disruptions, and even lost business and goodwill. Additionally, we could incur significant costs associated with the recovery from a cyberattack, and these costs may exceed, or the events to which they relate, may be excluded from, coverage under, our cyber insurance.
If customer information is inappropriately accessed and used by a third party or an employee for illegal purposes, such as identity theft, we may be responsible for any losses the affected applicant or borrower may have incurred as a result of misappropriation. In such an instance, we may be liable to a governmental authority for fines or penalties associated with a lapse in the integrity and security of our customers' information. Additionally, if we are the target of a successfulcyberattack, we may experience reputational harm that could impact our standing with our borrowers and adversely impact our financial results.
We regularly update our existing information technology systems and install new technologies when deemed necessary and regularly provide employee awareness training around phishing, malware, and other cyber risks and physical security to address the risk of cyberattacks and other security breaches. However, such preventative measures may not be sufficient to prevent all future cyberattacks or breaches of customer information. Additionally, most of our employees work remotely or in a hybrid arrangement and will continue to do so for the foreseeable future. Remote and hybrid working arrangements at our Company (and at many third-party providers) increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks. While we have designed our controls and processes to operate in a remote working environment, there is a heightened risk
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such controls and processes may not detect or prevent unauthorized access to our information systems. There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with or effective in protecting our information technology systems and confidential information. Because we make extensive use of service providers that support our operations, significant cyberattacks that disrupt or compromise third-party IT Systems could materially impact our business. The continued development and integration of artificial intelligence in our or third-party providers’ operations is expected to pose new and unknown cybersecurity risks.
In addition, we need to comply with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the United States, Europe and elsewhere. For example, the European Union adopted the General Data Protection Regulation (“GDPR”), which became effective on May 25, 2018, and the State of California adopted the California Consumer Privacy Act of 2018 (“CCPA”) and the California Privacy Rights Act of 2020 (“CPRA”). The GDPR, CCPA, and CPRA, among others, impose additional obligations on companies regarding the handling of personal data, provide certain individual privacy rights to persons whose data is stored and create new audit requirements for higher risk data. Compliance with existing, proposed and recently enacted laws (including implementation of the privacy and process enhancements called for under the GDPR) and regulations can be costly; any failure to comply with these regulatory standards could subject us to legal and reputational risks.
Risks Related to Our Organization and Structure
Certain provisions of Maryland law could inhibit changes in control.
Certain provisions of the Maryland General Corporation Law (the “MGCL”) may have the effect of deterring a third party from making a proposal to acquire us or of impeding a change in control under circumstances that otherwise could provide the holders of our common stock with the opportunity to realize a premium over the then-prevailing market price of our common stock.
We are subject to the “business combination” provisions of the MGCL that, subject to limitations, prohibit certain business combinations (including a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities) between us and an “interested stockholder” (defined generally as any person who beneficially owns 10% or more of our then outstanding voting power of our capital stock or an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of our then outstanding voting power of our then outstanding capital stock) or an affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose fair price or supermajority stockholder voting requirements on these combinations. These provisions of the MGCL do not apply, however, to business combinations that are approved or exempted by a board of directors prior to the time that the interested stockholder becomes an interested stockholder.
The “control share” provisions of the MGCL provide that holders of “control shares” of the Company (defined as shares which, when aggregated with other shares controlled by the stockholder (except solely by virtue of a revocable proxy) entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct and indirect acquisition of ownership or control of issued and outstanding “control shares”) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding votes entitled to be cast by the acquirer of control shares, our officers and our personnel who are also our directors.
Certain provisions of the MGCL permit our board of directors, without stockholder approval and regardless of what is currently provided in our charter or bylaws, to adopt certain mechanisms, some of which (for example, a classified board) we do not yet have. These provisions may have the effect of limiting or precluding a third party from making an acquisition proposal for us or of delaying, deferring or preventing a transaction or a change in control of the Company under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then current market price. Our charter contains a provision whereby we elect to be subject to the provisions of Title 3, Subtitle 8 of the MGCL relating to the filling of vacancies on our board of directors.
Our authorized but unissued shares of common and preferred stock may prevent a change in control of the Company.
Our charter authorizes us to issue additional authorized but unissued shares of common or preferred stock. In addition, our board of directors may, without stockholder approval, amend our charter to increase the aggregate number of shares of our common stock or the number of shares of stock of any class or series that we have authority to issue and classify or reclassify any unissued shares of common or preferred stock and set the preferences, rights and other terms of the classified or reclassified shares. As a result, our board of directors may establish a class or series of common or preferred stock with preferences, powers and rights, voting or otherwise, that are senior to, or otherwise conflict with, the rights of holders of our common stock or that could delay, defer, or prevent a transaction or a change in control of the Company that might involve a premium price for shares of our common stock or otherwise be in the best interests of our stockholders.
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Our rights and the rights of our stockholders to take action against our directors and officers are limited, which could limit our stockholders’ recourse in the event actions are taken that are not in our stockholders’ best interests.
Under Maryland law generally, a director is required to perform his or her duties in good faith, in a manner he or she reasonably believes to be in the best interests of the Company and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Under Maryland law, directors are presumed to have acted with this standard of care. In addition, our charter limits the liability of our directors and officers to us and our stockholders for money damages, except for liability resulting from:
actual receipt of an improperbenefit or profit in money, property or services; or
active and deliberatedishonesty by the director or officer that was established by a final judgment as being material to the cause of action adjudicated.
Our charter and bylaws obligate us to indemnify our directors and officers for actions taken by them in those capacities to the maximum extent permitted by Maryland law. In addition, we are obligated to advance the defense costs incurred by our directors and officers. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist absent the current provisions in our charter and bylaws.
Our charter contains limitations on our stockholders’ ability to remove our directors, which could make it difficult for our stockholders to effect changes to our management.
Our charter provides that a director may only be removed for cause upon the affirmative vote of holders of two-thirds of the votes entitled to be cast in the election of directors. Vacancies may be filled only by a majority of the remaining directors in office, even if less than a quorum. These requirements make it more difficult to change our management by removing and replacing directors and may delay, defer, or prevent a change in control of the Company that is in the best interests of our stockholders.
We are a holding company with minimal direct operations and rely largely on funds received from our subsidiaries for our cash requirements.
We are a holding company and conduct the majority of our operations through Walker & Dunlop, LLC, our operating company. We do not have, apart from our ownership of this operating company and certain other subsidiaries, any significant independent operations. As a result, we rely on distributions from our operating company to pay any dividends we might declare on shares of our common stock. We also rely largely on distributions from this operating company to meet any of our cash requirements, including our tax liability on taxable income allocated to us and debt payments.
In addition, because we are a holding company, any claims from common stockholders are structurally subordinated to all existing and future liabilities (whether or not for borrowed money) and any preferred equity of our operating company. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our operating company will be able to satisfy the claims of our common stockholders only after all of our and our operating company's liabilities and any preferred equity have been paid in full.
Risks Related to Our Financial Statements
Our financial statements are based in part on assumptions and estimates which, if wrong, could result in unexpected cash and non-cash losses in the future, and our financial statements depend on our internal control over financial reporting.
Pursuant to generally accepted accounting principles in the United States of America (“GAAP”), we are required to use certain assumptions and estimates in preparing our financial statements, including in determining credit loss and indemnification reserves and the fair value of Mortgage Servicing Rights (“MSRs”), among other items. We make fair value determinations based on internally developed models or other means which ultimately rely to some degree on management judgment. These and other assets and liabilities may have no direct observable price levels, making their valuation particularly subjective as they are based on significant estimation and judgment. Several of our accounting policies are critical because they require management to make difficult, subjective, and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. If assumptions or estimates underlying our financial statements are incorrect, losses may be greater than those expectations.
Our existing goodwill could become impaired, which may require us to take significant non-cash charges.
Under current accounting guidelines, we evaluate our goodwill at each of our reporting units for potential impairment annually or more frequently if circumstances indicate impairment may have occurred. In addition to the annual impairment evaluation, we evaluate at least quarterly, whether events or circumstances have occurred in the period subsequent to the annual impairment testing which indicate that it is
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more likely than not an impairmentloss has occurred. Any impairment of goodwill as a result of such analysis would result in a non-cash charge against earnings, which charge could materially adversely affect our reported results of operations, stockholders’ equity, and our stock price.
Any factor described in this filing or in any of our other SEC filings could by itself, or together with other factors, adversely affect our financial results and condition. Refer to our quarterly reports on Form 10-Q filed with the SEC in 2026 for material changes to the above discussion of risk factors.
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Multifamily Lending, Commercial Real Estate Brokerage Service, and Property Sales
We originate and sell multifamily loans through the programs of Fannie Mae, Freddie Mac, Ginnie Mae, and HUD, with which we have licenses and long-established relationships. We retain servicing rights and asset management responsibilities on nearly all loans that we originate for the Agencies’ programs. We are approved as a Fannie Mae DUS lender nationally, a Freddie Mac Optigo lender nationally for Conventional, Seniors Housing, Targeted Affordable Housing and Small Balance Loans, a HUD MAP lender nationally, a HUD LEAN lender nationally, and a Ginnie Mae issuer. We broker and service loans for many life insurance companies, commercial banks, and other institutional investors, in which cases we do not fund the loan but rather act as a loan broker. Fannie Mae recently announced that we ranked as its largest DUS lender in 2025, by loan deliveries, and Freddie Mac recently announced that we ranked as its 3 rd largest Freddie Mac lender in 2025, by loan deliveries. Our market share with Fannie Mae and Freddie Mac was 11.2% on a combined basis, by loan deliveries in 2025, compared to 10.7% in 2024. Additionally, we were the 5 th largest overall lender for HUD for its fiscal year ended September 30, 2025 .
We fund loans for the Agencies’ programs, generally through warehouse facility financings, and sell them to investors in accordance with the related loan sale commitment, which we obtain at rate lock. Proceeds from the sale of the loan are used to pay off the warehouse facility. The sale of the loan is typically completed within 60 days after the loan is closed, and we retain the right to service substantially all of these loans. In cases where we do not fund the loan, we act as a loan broker and service some of the loans. Our mortgage bankers who focus on loan brokerage are engaged by borrowers to work with a variety of institutional lenders to find the most appropriate loan. These loans are then funded directly by the institutional lender, and for those brokered loans we service, we collect ongoing servicing fees while those loans remain in our servicing portfolio. The servicing fees we typically earn on brokered loan transactions are lower than the servicing fees we earn on Agency loans.
We recognize revenue when we make simultaneous commitments to originate a loan to a borrower and sell that loan to an investor. The revenues earned reflect the fair value attributable to loan origination fees, premiums on the sale of loans, net of any co-broker fees, and the fair value of the expected net cash flows associated with servicing the loans, net of any guaranty obligations retained. We also recognize revenue when we receive the origination fee from a brokered loan transaction. Other transaction-related sources of revenue include (i) net warehouse interest income we earn or expense we incur while the loan is held for sale, (ii) sales commissions for brokering the sale of multifamily and hospitality properties, and (iii) syndication and transaction-based asset management fees from our investment management activities.
We are currently not exposed to unhedged interest rate risk during the loan commitment, closing, and delivery process. The sale or placement of each loan to an investor is negotiated concurrently with establishing the coupon rate for the loan. We also seek to mitigate the risk of a loan not closing. We have agreements in place with the Agencies that specify the cost of a failed loan delivery in the event we fail to deliver the loan to the investor. To protect us against such fees, we require a deposit from the borrower at rate lock that is typically more than the potential fee. The deposit is returned to the borrower only once the loan is closed. Any potential loss from a catastrophic change in the property condition while the loan is held for sale using warehouse facility financing is mitigated through property insurance equal to replacement cost. We are also protected contractually from an investor’s failure to purchase the loan. We have experienced a de minimis number of failed deliveries in our history and have incurred insignificant losses on such failed deliveries.
We have risk-sharing obligations on substantially all loans we originate under the Fannie Mae DUS program. When a Fannie Mae DUS loan is subject to full risk-sharing, we absorb losses on the first 5% of the unpaid principal balance of a loan at the time of loss settlement, and above 5% we share a percentage of the loss with Fannie Mae, with our maximum loss capped at 20% of the original loan amount (subject to doubling or tripling if the loan does not meet specific underwriting criteria or if the loan defaults within 12 months of its sale to Fannie Mae). Our full risk-sharing is currently limited to loans up to $400 million, which equates to a maximum loss per loan of $80 million (such exposure would occur in the event that the underlying collateral is determined to be completely without value at the time of loss), updated from $300 million in the fourth quarter of 2025. For loans in excess of $400 million, we receive modified risk-sharing. We also may request modified risk-sharing at the time of origination on loans below $400 million, which reduces our potential risk-sharing losses from the levels described above if we do not believe that we are being fully compensated for the risks of the transactions. The full risk-sharing limit in prior years was less than $400 million. Accordingly, loans originated in those prior years were subject to risk-sharing at lower levels. In limited circumstances we have agreed, and may in the future agree, with Fannie Mae to increase our loss sharing up to 100% of a loan’s UPB in lieu of the risk-sharing agreement described above. Our servicing fees for risk-sharing loans include compensation for the risk-sharing obligations and are substantially larger than the servicing fees we receive from Fannie Mae for loans with no risk-sharing obligations.
Through WDIS, we offer property sales brokerage services to owners and developers of multifamily and hospitality properties that are seeking to sell these properties. Through these property sales brokerage services, we seek to maximize proceeds and certainty of closure for our clients using our knowledge of the commercial real estate and capital markets and relying on our experienced transaction professionals. Our property sales services are offered in various regions throughout the United States and cover many major markets. We have added several property sales brokerage teams over the past few years and continue to seek to add other property sales brokers, with the goal of continuing to expand the depth and number of regions covered by our brokerage services.
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Commercial Loan Servicing
We retain servicing rights on substantially all the loans we originate and sell to Fannie Mae, Freddie Mac, and HUD, and generate revenues from the fees we receive for servicing the loans, from the placement fees on escrow deposits held on behalf of borrowers, and from other ancillary fees. Servicing fees are set at the time an investor agrees to purchase the loan and are generally paid monthly for the duration of the loan based on the unpaid principal balance of the loan. Our Fannie Mae servicing arrangements generally provide for prepayment protection in the event of a voluntary prepayment. For loans serviced for Freddie Mac, the economic deterrent that reduces the risk of loan prepayment comes in the form of a defeasance requirement wherein the borrower is required to replace the prepaid loan with securities that offer an equivalent return. We also service loans for many of the life insurance companies, conduits and private credit vehicles to which we broker loans. Our responsibilities for servicing brokered loans are limited to cashiering only, and typically earn lower servicing fees than our Fannie Mae, Freddie Mac and HUD loan servicing arrangements. For loans serviced outside of Fannie Mae, Freddie Mac and HUD, we typically do not have similar prepayment protections that reduce the risk of loan prepayment.
As of December 31, 2025, our servicing portfolio was $144.0 billion, up 6% from December 31, 2024, which was the 6 th largest commercial/multifamily primary and master servicing portfolio in the nation according to the Mortgage Bankers’ Association’s (“MBA”) 2025 year-end survey (the “Survey”). Our servicing portfolio includes $72.7 billion of loans serviced for Fannie Mae and $42.6 billion for Freddie Mac, making us the 1 st and 7 th largest servicer of Fannie Mae and Freddie Mac multifamily loans in the nation, respectively, according to the Survey. Also included in our servicing portfolio is $11.6 billion of multifamily HUD loans, the 4 th largest HUD primary and servicing portfolio in the nation according to the Survey.
Investment Management Services
WDIP is a registered investment adviser and general partner of private commercial real estate investment funds focused on the management of debt, preferred equity, and mezzanine equity investments through private middle-market commercial real estate funds and separately managed accounts. WDIP’s current AUM of $2.7 billion primarily consist of the “Funds”, separate accounts managed for life insurance companies and a preferred equity JV with a large Canadian pension fund. AUM for the Funds and for the separate accounts consists of both unfunded commitments and funded investments. Unfunded commitments are highest during the fund raising and investment phases. AUM disclosed in this 10-K may differ from regulatory assets under management disclosed on WDIP’s Form ADV.
WDIP typically receives management fees based on limited partner capital commitments, unfunded investment commitments, and funded investments. Additionally, with respect to Fund IV, Fund V, Fund VI, and Fund VII, WDIP receives a percentage of the profits above the fund expenses and preferred return specified in the fund offering agreements, referred to as “carry” or “promote”. Unrealized carry is recognized based on the estimated fair value of the underlying investments, and realized carry is recognized when an investment is repaid and capital is returned to investors in the respective fund.
Through WDAE, a wholly owned subsidiary of the Company, we are the 9 th largest tax credit syndicator in the U.S., as measured by the number of Affordable units under management, and an affordable housing developer through various joint venture partnerships. Affordable assets under management from our LIHTC operations is part of our strategy to grow our investment management platform and to strengthen our position in the affordable housing debt, equity, and property sales sector. We manage $15.9 billion of affordable AUM and have an established tax syndication and affordable housing development platform from which we earn investment management, syndication, and other LIHTC related fees.
Basis of Presentation
The accompanying consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiaries, and all intercompany transactions have been eliminated. During the fourth quarter of 2025, we granted profit interest awards to certain non-executive employees of Walker & Dunlop, LLC to better align their incentive compensation with our goals. The profit interest awards allocate 15% of the income before taxes of a wholly owned subsidiary to these employees. The wholly owned subsidiary is focused on debt financing transactions closed by these employees and is part of our Capital Markets segment.
Critical Accounting Estimates
Our consolidated financial statements have been prepared in accordance with GAAP, which requires management to make estimates based on certain judgments and assumptions that are inherently uncertain and affect reported amounts. The estimates and assumptions are based on historical experience and other factors management believes to be reasonable. Actual results may differ from those estimates and assumptions and the use of different judgments and assumptions may have a material impact on our results. The following critical accounting estimates involve significant estimation uncertainty that may have or is reasonably likely to have a material impact on our financial condition
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or results of operations. Additional information about our critical accounting estimates and other significant accounting policies is discussed in NOTE 2 of the consolidated financial statements.
Mortgage Servicing Rights. MSRs are recorded at fair value at loan sale. The fair value at loan sale is based on estimates of expected net cash flows associated with the servicing rights and takes into consideration an estimate of loan prepayment. Initially, the fair value amount is included as a component of the derivative asset fair value at the loan commitment date. The estimated net cash flows from servicing, which includes assumptions for discount rate, placement fees on escrow accounts (“placement fees”), prepayment speeds, and servicing costs, are discounted using a discounted cash flow model at a rate that reflects the credit and liquidity risk of the MSR over the estimated life of the underlying loan. The discount rates used throughout the periods presented for all MSRs were between 8-14% and varied based on the loan type. The life of the underlying loan is estimated giving consideration to the prepayment provisions in the loan and assumptions about loan behaviors around those provisions. Our model for MSRs assumes no prepayment prior to the expiration of the prepayment provisions and full prepayment of the loan at or near the point when the prepayment provisions have expired. The estimated net cash flows also include cash flows related to the future earnings from placement of escrow accounts associated with servicing the loans. We include a servicing cost assumption to account for our expected costs to service a loan. The estimated placement fee rate associated with servicing the loan increases estimated cash flows, and the estimated future cost to service the loan decreases estimated future cash flows. The servicing cost assumption has had a de minimis impact on the estimate historically. We record an individual MSR asset for each loan at loan sale.
The assumptions used to estimate the fair value of capitalized MSRs are developed internally and are periodically compared to assumptions used by other market participants. Due to the relatively few transactions in the multifamily MSR market and the lack of significant changes in assumptions by market participants, we have experienced limited volatility in the assumptions historically and do not expect to observe significant changes in the foreseeable future, including the assumption that most significantly impacts the estimate: the discount rate. We actively monitor the assumptions used and make adjustments when market conditions change, or other factors indicate such adjustments are warranted. Over the past several years, we have adjusted the placement fee rate assumption several times to reflect the current and expected future earnings rate projected for the life of the MSR as the interest rate environment has experienced significant volatility over the past several years. A 100-basis point change in the discount rate would increase or decrease the capitalized MSRs for the year ended December 31, 2025 by 4%. A 200-basis point change in the discount rate would increase or decrease the capitalized MSRs for the year ended December 31, 2025 by 7%. These sensitivities are hypothetical and should be used with caution as they do not include interplay among assumptions.
Subsequent to loan origination, the carrying value of the MSR is amortized over the expected life of the loan. We engage a third party to assist in determining an estimated fair value of our existing and outstanding MSRs on at least a semi-annual basis, primarily for financial statement disclosure purposes. Changes in our discount rate and placement fee rate assumptions on existing and outstanding MSRs may materially impact the fair value of our MSRs (NOTE 3 of the consolidated financial statements details the portfolio-level impact of hypothetical changes in the discount rate and placement fee rate).
Allowance for Risk-Sharing Obligations. This reserve liability (referred to as “allowance”) for risk-sharing obligations relates to our Fannie Mae at-risk and Freddie Mac SBL servicing portfolios and is presented as a separate liability on our balance sheets. We record an estimate of the loss reserve for the current expected credit losses (“CECL”) for all loans in these servicing portfolios. For those loans that are collectively evaluated, we use the weighted-average remaining maturity method (“WARM”). WARM uses an average annual loss rate that contains loss content over multiple vintages and loan terms and is used as a foundation for estimating the collective reserves. The average annual loss rate is applied to the estimated unpaid principal balance over the contractual term, adjusted for estimated prepayments and amortization to arrive at the allowance on loans that are collectively evaluated (“CECL allowance”). We currently use one year for our reasonable and supportable forecast period (“forecast period”) as we believe forecasts beyond one year are inherently less reliable. During the forecast period we apply an adjusted loss factor based on generally available economic and unemployment forecasts and a blended loss rate from historical periods that we believe reflect the forecasts. We revert to the historical loss rate over a one-year period on a straight-line basis. Over the past couple of years, the loss rate used in the forecast period has been updated to reflect our expectations of the economic conditions over the coming year in relation to the historical period. For example, over the past two years, we updated the loss rate used in the forecast period several times within a range of 2.1 basis points to 2.3 basis points. The forecast loss rate fluctuating within a tight range reflects our relatively unchanged view of the uncertainty of the evolving macroeconomic conditions facing the multifamily sector. We made multiple revisions to the loss rate used in the forecast period in the past, and those changes have significantly impacted the CECL reserve.
One of the key components of a WARM calculation is the runoff rate, which is the expected rate at which loans in the current portfolio will amortize and prepay in the future based on our historical prepayment and amortization experience. We group loans by similar origination dates (vintage) and contractual maturity terms for purposes of calculating the runoff rate. We originate loans under the DUS program with various terms generally ranging from several years to 15 years; each of these various loan terms has a different runoff rate. The runoff rates applied to each vintage and contractual maturity term are determined using historical data; however, changes in prepayment and amortization
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behavior may significantly impact the estimate. We have not experienced significant changes in the runoff rate since we implemented CECL in 2020.
The weighted-average annual loss rate is calculated using a ten-year look-back period, utilizing the average portfolio balance and settled losses for each year. A ten-year lookback period is used as we believe this period of time includes sufficiently different economic conditions to generate a reasonable estimate of expected results in the future, given the relatively long-term nature of the current portfolio. As the weighted-average annual loss rate utilizes a rolling ten-year look-back period, the loss rate used in the estimate will change as loss data from earlier periods in the look-back period continue to roll off as new loss data are added. For example, in the first quarter of 2024, loss data from earlier periods in the look-back period with significantly higher losses rolled off and were replaced with more recent loss data with fewer losses, resulting in the weighted-average historical annual loss rate changing from 0.6 basis points to 0.3 basis points. Our historical loss rate over the past ten years is 0.2 basis points.
NOTE 4 of the consolidated financial statements outlines adjustments made in the loss rates used to account for the expected economic conditions as of a given period and the related impact on the CECL allowance.
Changes in our expectations and forecasts have materially impacted, and in the future may materially impact, these inputs and the CECL allowance.
We evaluate our risk-sharing loans on a quarterly basis to determine whether there are loans that are probable of foreclosure and thus collateral dependent. Specifically, we assess a loan’s qualitative and quantitative risk factors, such as payment status, property financial performance, local real estate market conditions, loan-to-value ratio, debt-service-coverage ratio, and property condition. When a loan is determined to be probable of foreclosure based on these factors (or has foreclosed), we remove the loan from the WARM calculation and individually assess the loan for potential credit loss. This assessment requires certain judgments and assumptions to be made regarding the property values and other factors that may differ significantly from actual results. Loss settlement with Fannie Mae has historically concluded within 18 to 36 months after foreclosure. Historically, the initial collateral-based reserves have not varied significantly from the final settlement.
We actively monitor the judgments and assumptions used in our Allowance for Risk-Sharing Obligation estimate and make adjustments to those assumptions when market conditions change, or when other factors indicate such adjustments are warranted. We believe the level of Allowance for Risk-Sharing Obligation is appropriate based on our expectations of future market conditions; however, changes in one or more of the judgments or assumptions used above could have a significant impact on the reserve. For example, a 10% change in the forecasted loss rate as of December 31, 2025 would have increased or decreased the allowance for risk-sharing obligations by 8%. A 20% change in the forecasted loss rate as of December 31, 2025 would have increased or decreased the allowance for risk-sharing obligations by 16%. These sensitivities are hypothetical and should be used with caution as they do not include interplay among assumptions.
Property Valuations. As noted above, property valuations are a key component of our collateral-based reserves for our risk-sharing portfolio. Additionally, property valuations impact our impairment analyses for real estate held for use (“real estate HFU”) and other real estate owned (“OREO”), the assessment of allowances for loan losses, and the assessment of any e xpected principal losses on loan repurchase. Those property values are determined using (i) standard appraisals obtained from certified appraisers at national firms subjected to management review or (ii) internal management valuations using inputs and assumptions such as capitalization rates (“cap rates”), net operating income of the property, vacancy rates, bad debt expense, and rental rates. The appraisals often include assumptions about comparable sales and cap rates, among other things. Management reviews those assumptions against its own experience and market data to assess the reasonableness of the assumptions and the resulting property valuations. When management determines the property valuation using an internal model, management maximizes the use of its historical experience with the property and market data from well-recognized data providers. We also may benchmark our historical experience with external data sources to assess the reasonableness of our inputs and assumptions.
We believe our property valuations are reasonable and in line with those a market participant would develop. However, actual sales prices for these properties may differ from those used by management. Additionally, significant changes in the assumptions or judgments would have a significant impact on our reserves and impairment analyses and thus our reported financial results. As noted above, with respect to the property valuations and associated reserves for our risk-sharing portfolio, we have not experienced significant changes from the time of initial reserve and final settlement. However, with respect to properties used for reserves on repurchased loans and impairment analyses for real estate HFU and OREO, we have never disposed of a property.
Goodwill . As of both December 31, 2025 and 2024, goodwill was $868.7 million. Goodwill represents the excess of cost over the identifiable net assets of businesses acquired. Goodwill is assigned to the reporting unit to which the acquisition relates. Goodwill is recognized as an asset and is reviewed for impairment annually as of October 1. Between annual impairment analyses, we perform an evaluation of recoverability, when events and circumstances indicate that it is more-likely than not that the fair value of a reporting unit is below its carrying
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value. Impairment testing requires an assessment of qualitative factors to determine if there are indicators of potential impairment, followed by, if necessary, an assessment of quantitative factors. These factors include, but are not limited to, whether there has been a significant or adverse change in the business climate that could affect the value of an asset and/or significant or adverse changes in cash flow projections or earnings forecasts. These assessments require management to make judgments, assumptions, and estimates about projected cash flows, discount rates and other factors.
In 2022, we acquired GeoPhy, a software development company focused on data analytics and product development with a specific concentration in U.S. commercial real estate. As part of the acquisition, a significant portion of the transaction proceeds were contingent upon the achievement of performance-based hurdles tied to commercial real estate transaction volumes and associated revenues from the date of the acquisition through December 31, 2025. Due to the sustained challenging macroeconomic conditions in the U.S. commercial real estate sector from the date of the acquisition through December 31, 2025, outlined more fully in Overview of Current Business Environment , our projected cash flows for this reporting unit declined, resulting in goodwill impairment during 2024 of $33.0 million or 3.7% of the aggregate goodwill balance outstanding at the time. We attributed this goodwill impairment to one of the reporting units to which the GeoPhy operations and goodwill are assigned, which is a component of the Capital Markets segment.
As of December 31, 2025, our assessment of the remaining goodwill at each of our reporting units indicates they are not impaired (NOTE 9 of the consolidated financial statements details the changes in the goodwill balance).
Overview of Current Business Environme nt
From 2022 through the first quarter of 2025, the commercial real estate (CRE) market, and in particular the multifamily sector experienced a challenging environment shaped by elevated interest rates that directly impacted the cost and availability of capital, slower rent growth that has impacted growth expectations and asset valuations, and macroeconomic uncertainties that impacted investors’ long-term outlook and overall demand for transactions.
Many of these factors showed signs of improvement throughout 2025 and the outlook for the commercial real estate sector has improved, and transaction activity has steadily grown over the course of the year. The impact of these factors can be summarized as follows:
Interest Rates & Cost of Capital: The Federal Open Market Committee’s (“FOMC”) aggressive rate hikes that began in 2022 dramatically increased the cost of capital for commercial real estate operators in a short period of time. Higher borrowing costs reduced leverage, pressured debt service coverage ratios, and led to asset valuation declines as cap rates adjusted. Deal flow slowed considerably as buyers and sellers struggled to align on pricing in an environment of heightened uncertainty. Beginning in 2024, the FOMC began easing monetary policy and decreasing its target Federal Funds Rate to 3.50% to 3.75% by the end of 2025. The FOMC has indicated it will remain data dependent and that conditions are likely to lead to rates remaining stable in the near term as the FOMC remains attentive to economic growth and the labor markets. The FOMC’s future rate policy will be a key driver of the cost of capital, transaction volume and capital markets activity. A pronounced pause in rate hikes or additional rate cuts could unlock additional demand and further improve financing conditions for commercial real estate assets. Our expectation is that long-term interest rates, which stabilized in the spring of 2025, will remain at similar levels in the upcoming year and transaction activity will continue its steady improvement again in 2026.
Capital Availability & Lending Markets: During the period of rapid interest rate increases by the FOMC, liquidity was constrained as lenders found it difficult to effectively price the long-term cost of capital. As interest rates have stabilized, capital has grown more abundant. Banks, life insurance companies, conduits (CMBS), and debt funds remain active but are selective, with a preference for high-quality assets and well-capitalized sponsors. Meanwhile, the availability of equity capital has also improved, although at higher spreads than periods prior the FOMC’s rate hikes. This has increased the availability of equity capital, and improved the overall transactions environment. For multifamily, which drives the vast majority of our transaction volumes, the GSEs remain the predominant suppliers of capital, deploying over $150 billion of capital to the industry in 2025, up from $120 billion in 2024. Entering 2025, the GSEs’ lending caps were set at a combined $146 billion, a 22% increase in capacity over 2024 volumes, and for 2026 the lending caps have been set at a combined $176 billion, another 21% increase over 2025. As Fannie Mae’s largest partner for seven consecutive years, and Freddie Mac’s third largest partner in 2025, we are the second largest combined GSE lender in the country. Their participation in the market is a significant driver of our financial performance, and a material increase in their lending activity should enhance our business and results from operations.
Multifamily Rent Growth & Asset Values: Rent growth has slowed considerably since the FOMC began increasing interest rates, particularly in high-supply Sun Belt markets. This has made it difficult for net operating income (NOI) growth to offset valuation declines caused by elevated interest rates. Markets with strong job growth and in-migration continue to see minor rent increases, with
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Zelman, our housing research business, reporting national rent growth of 1.3% in 2025. According to MSCI, in December 2025, multifamily property prices remained stable month-over-month but were down 1.3% year over year, which compares to a year over year decline of 4.2% the previous year. Notably, multifamily prices are estimated to have declined by 19.7% from peak levels in 2022 but remain 11.5% above pre-COVID January 2020 levels.
Other Macroeconomic Considerations: GDP growth has remained strong at 4.4% as of the third quarter of 2025. National unemployment remained low at 4.4% in December 2025, near 25-year lows. GDP growth and unemployment levels will drive FOMC policy decisions in 2026. According to RealPage, vacancies in the multifamily sector stabilized around 5.2% as of December 2025, consistent with the vacancy rate of 5.2% in December 2024. An all-time high number of multifamily units were delivered to the sector in 2024, particularly in high demand Sun Belt markets. Most of those units were absorbed in 2024 and 2025, and we expect that absorption will continue into the first half of 2026. Looking forward, multifamily completions are anticipated to decrease significantly due to stalled new construction over the last several years, largely driven by tighter liquidity and higher cost of capital. Long term, we believe the fundamentals for multifamily properties will trend positively due to constrained supply, recent negative trends in household formation and a persistent affordability advantage for renting over owning given a lack of entry-level single-family homes and the high cost of residential mortgages.
Fraud Trends in Commercial Real Estate: Over the last two years, several high-profile criminal proceedings and lawsuits have surfaced in the commercial real estate lending market alleging borrower fraud around loan collateral, asset title and borrower misrepresentation of asset financial performance that inflated net operating income. The existence of the fraud has been revealed following the prolonged period of market stress brought on by rapidly rising interest rates, higher inflation and stagnant rent growth. Federal prosecutors and regulators have ramped up enforcement and scrutiny of borrower misrepresentation and loan fraud over the last two years, indicating the historical risk is systemic, and no longer anecdotal. In total, we have been required to repurchase or indemnify the GSEs for $221.6 million of loans since 2024, largely driven by borrower fraud and misrepresentations. The repurchases to date represent only 19 basis points of our outstanding GSE mortgage lending portfolio as of December 31, 2025. Since 2024, we have incurred $33.5 million of loan related losses, representing the difference between the unpaid principal balance of the loans and the current estimated fair value of the loan or underlying collateral. In addition, since 2024, we have also incurred additional costs and expenses in connection with repurchased or indemnified assets totaling $31.3 million, which are principally driven by legal, financing, and other operating costs. In response to this risk, we have rolled out training around known red flags, enhanced our production and underwriting policies, procedures and internal controls, and strengthened our risk management and compliance practices to mitigate future risk associated with sophisticated borrower fraud schemes.
Multifamily remains one of the most resilient asset classes in CRE. Market participants are adjusting to current conditions and we expect the market to continue recovering and transaction activity to continue to increase. Improving conditions in the second half of 2025 led to increased transaction volumes across nearly all aspects of our business during 2025, which surged to $54.8 billion with notable increases in Brokered (37%), GSE (38%) and property sales (37%) transaction volumes compared to last year. Consequently, our Capital Markets segment produced net income of $89.8 million in 2025, up 35% compared to 2024.
Our Servicing & Asset Management segment is not directly correlated to the transaction markets like our Capital Markets segment. This segment’s total managed portfolio of $162.6 billion as of December 31, 2025 was up 6% from December 31, 2024, and included our $144.0 billion loan servicing portfolio and our $18.6 billion of AUM. Total revenues for the segment decreased 4%, to $566.6 million, while net income decreased 46%, to $85.1 million, in 2025 compared to 2024, with net income decreasing in the fourth quarter of 2025 compared to 2024. We hold escrow deposits on behalf of our servicing portfolio and place those deposits with large, multinational banks that earn close to the Federal funds rate. Revenues from those escrow deposits have benefitted over the last several years from higher short-term interest rates, but we have begun to see declines in those revenues as the FOMC has eased monetary policy and adjusted short-term rates downward. We expect that trend to continue, but moderate, in 2026 as the FOMC may slow the pace, and rate, of interest rate reductions. We have increased our focus on scaling our assets under management, and in the fourth quarter of 2024 we successfullyclosed a first round of $200 million of equity capital for Debt Fund II from life insurance companies, pension funds, high net worth investors and a co-investment from Walker & Dunlop. The initial closing provided our investment management team with over $500 million of levered capital, of which approximately $490 million was deployed into transitional multifamily assets in 2025. We continue to actively raise capital for Debt Fund II, and we expect the revenues of our investment management business to grow as that capital is raised and deployed. This segment also includes the activities of WDAE, an alternative investment manager focused on affordable housing, including LIHTC syndication and joint venture development. We ranked as the ninth largest LIHTC syndicator in 2025 and continue to pursue combined LIHTC syndication and affordable housing services to generate significant long-term financing, property sales, and syndication opportunities. We expect the revenues for WDAE to remain fairly stable moving forward, as the realization revenues from our historical LIHTC investments are tied to the underlying value of the affordable assets, and we do not expect a material increase in the value of affordable assets in the near term due to the aforementioned macroeconomic challenges facing the commercial real estate sector.
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Factors That May Impact Our Operating Results
We believe that our results are affected by a number of factors, including the items discussed below.
Performance of Multifamily and Other Commercial Real Estate Related Markets. Our business is dependent on the general demand for, and value of, commercial real estate and related services, particularly multifamily, which are sensitive to long-term mortgage interest rates and other macroeconomic conditions and the continued existence of the GSEs multifamily business. Demand for multifamily and other commercial real estate generally increases during stronger economic environments, resulting in increased property values, property sales, transaction volumes, and loan origination volumes. During weaker economic environments, multifamily and other commercial real estate may experience higher property vacancies, lower demand and reduced values. These conditions can result in lower property sales volume and loan origination volume, as well as an increased level of servicer advances and losses from our Fannie Mae DUS risk-sharing obligations.
The Level of Losses from Fannie Mae Risk-Sharing Obligations. Under the Fannie Mae DUS program, we share risk of loss on most loans we sell to Fannie Mae. In the majority of cases, we absorb the first 5% of any losses on the loan’s unpaid principal balance at the time of loss settlement, and above 5% we share a percentage of the loss with Fannie Mae, with our maximum loss generally capped at 20% of the loan’s unpaid principal balance on the origination date. In some instances, we negotiate a cap that may be higher, including up to 100% of a loan’s unpaid principal balance or lower for loans with unique attributes. As a result, a rise in defaults on loans in our at-risk portfolio could have a material adverse effect on us, including our profitability and liquidity.
The Number and UPB of Loan Repurchases and Indemnifications. In the event of a breach of any representation or warranty concerning a loan, Fannie Mae or Freddie Mac could, among other things, require us to repurchase the full amount of the loan and/or seek indemnification for losses from us, or, for Fannie Mae DUS loans, increase the level of risk-sharing on the loan. Our obligation to repurchase the loan is independent of our risk-sharing obligations. The GSEs could require us to repurchase the loan and also reimburse them for legal costs, defaulted interest, and prepayment costs from repurchasing the loans from the securitization trust if representations and warranties are breached, even if the loan is not in default. A significant amount of repurchase or indemnification obligations imposed on us could result in losses upon later sale of the loan or property and also result in operating costs that exceed operating income on any foreclosed property. Additionally, repurchases and indemnifications could increase our liquidity needs either to repurchase loans or post collateral for indemnification obligations.
The Price of Loans in the Secondary Market. Our profitability is determined in part by the price we are paid for the loans we originate. A component of our origination related revenues is the premium we recognize on the sale of a loan. Stronger investor demand typically results in larger premiums while weaker demand results in little to no premium. Prices for new loans have not been materially impacted during this period of rising, and now higher, interest rates.
Market for Servicing Commercial Real Estate Loans. Servicing fee rates for new loans are set at the time we enter into a loan sale commitment based on origination fees, competition, prepayment rates, and any risk-sharing obligations we undertake. Changes in servicing fee rates impact the value of our MSRs and future servicing revenues, which could impact our profit margins and operating results immediately and over time. During the period of rapidly rising interest rates our fees for servicing new loans, particularly Fannie Mae loans, faced downward pressure to reduce the overall cost of borrowing to our clients. As interest rates have stabilized, along with the associated cost of capital, our servicing fees on new loans have also stabilized, albeit at lower levels than prior to this period of higher interest rates.
The Overall Loan Origination Mix. The loan product mix we originate can significantly impact our overall operating results. For example, an increase in loan origination volume for our two highest-margin products, Fannie Mae and HUD loans, without a change in total loan origination volume would increase our overall profitability, while a decrease in the loan origination volume of these two products without a change in total loan origination volume would decrease our overall profitability, all else being equal. The higher profitability for Fannie Mae and HUD loans is largely driven by higher revenues attributable to the fair value of expected net cash flows from servicing, net of guaranty obligation.
The Affordable Housing Market. The profitability of our LIHTC operations is impacted by the demand for and the financial performance of the affordable housing market and the continued existence of federal income tax credits for these properties. For example, we earn syndication fees based on new funds we are able to syndicate for investors and asset management fees based on performance of the underlying LIHTC properties and dispositions of these properties. Strong demand for LIHTC properties typically results in opportunities for syndication of LIHTC funds and high prices for dispositions.
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The Duration and Types of Loans . The fair value of expected net cash flows from our MSRs, net of guaranty obligation is directly impacted by the duration of the loan products originated. For example, an increase in the debt financing volume of five-year loan products at the expense of ten-year loan products directly reduces the expected future net cash flows and therefore the fair value of the expected net cash flows from servicing.
Revenues
Loan Origination and Debt Brokerage Fees, net. Loan origination fee revenue is recognized when we record a derivative asset upon the simultaneous commitments to originate a loan with a borrower and sell to an investor or when a loan that we broker closes with the institutional lender. The commitment asset related to the loan origination fee is recognized at fair value, which reflects the fair value of the contractual loan origination related fees and any sale premiums, net of co-broker fees. Also included in revenues from loan origination activities are changes to the fair value of loan commitments, forward sale commitments, and loans held for sale that occur during their respective holding periods. Upon sale of the loans, no gains or losses are recognized as these loans are recorded at fair value during their holding periods.
Brokered loans tend to have lower origination fees because they often require less time to execute, there is more competition for brokerage assignments, and because the borrower will also have to pay an origination fee to the institutional lender. Loan origination fee revenue for brokered loans is recognized when we have completed the services for the loan to be originated by the institutional lender.
Premiums received on the sale of a loan result when a loan is sold to an investor for more than its face value. There are various reasons investors may pay a premium when purchasing a loan. For example, the fixed rate on the loan may be higher than the rate of return required by an investor or the characteristics of a particular loan may be desirable to an investor. We do not receive premiums on brokered loans, since we are not the lender.
Fair Value of Expected Net Cash Flows from Servicing, net of Guaranty Obligation. Revenue related to expected net cash flows from servicing is recognized at the loan commitment date, similar to the loan origination fees, as described above. The derivative asset is recognized at fair value, which reflects the estimated fair value of the expected net cash flows associated with the servicing of the loan, reduced by the estimated fair value of any guaranty obligations to be assumed. MSRs and guaranty obligations are recognized as assets and liabilities, respectively, upon the sale of the loans.
MSRs are recorded at fair value upon loan sale. The fair value is based on estimates of expected net cash flows associated with the servicing rights. The estimated net cash flows are discounted at a rate that reflects the credit and liquidity risk of the MSR over the estimated life of the loan.
The “Critical Accounting Estimates” section above and NOTE 2 of the consolidated financial statements provide additional details of the accounting for these revenues.
Servicing Fees. We service nearly all loans we originate for Fannie Mae, Freddie Mac, HUD, and some loans we broker. We earn servicing fees for performing certain loan servicing functions such as processing loan, tax, and insurance payments and managing escrow balances. Servicing generally also includes asset management functions, such as monitoring the physical condition of the property, analyzing the financial condition and liquidity of the borrower, and performing loss mitigation activities as directed by the Agencies.
Our servicing fees on loans we originate provide a stable revenue stream. They are based on contractual terms, are earned over the life of the loan, and are generally not subject to significant prepayment risk. Our Fannie Mae and Freddie Mac servicing agreements generally provide for prepayment fees in the event of a voluntary prepayment. Accordingly, we currently do not hedge our servicing portfolio for prepayment risk. Any prepayment fees received are included in Other revenues .
HUD has the right to terminate our current servicing engagements for cause. In addition to termination for cause, Fannie Mae and Freddie Mac may terminate our servicing engagements without cause by paying a termination fee. Institutional investors typically may terminate our servicing engagements for brokered loans at any time with or without cause, without paying a termination fee.
Property Sales Broker Fees. We earn property broker sales fee revenue when our investment sales team completes the sale of a multifamily investment property or land real estate. The amount of the property sales brokers fees we earn is based upon a percentage of the final sale price of the investment sold.
Investment Management Fees. We manage invested capital from third-party investors through an investment fund structure. The capital placed into the investment fund is utilized to make investments in commercial real estate investment opportunities, primarily as equity in commercial real estate operating partnerships or LIHTC-generating multifamily properties. Additionally, we may utilize the capital to fund debt financing opportunities through certain investment funds, primarily to multifamily owner-operators. We earn an investment management
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or asset management fee based on a contractual percentage of the invested capital. For market-rate investments, we earn and collect the investment management fees through the returns of the investment funds. For LIHTC investments, we collect the asset management fees (“AMF”) through the combination of current payments and asset dispositions. NOTE 2 of the consolidated financial statements provides additional details of the accounting for AMF revenues. We also are entitled to a set percentage of the sales proceeds for properties in LIHTC funds. We, as general partner, may sell properties in the funds after the tax credits have been fully distributed to the investors in the funds. The proceeds are used to pay the fund’s obligations and provide any excess as a return to the investor(s) in the fund, with a small percentage retained by us for executing the sale. These sales fees are also included as a component of this line item.
Net Warehouse Interest Income (Expense). We earn warehouse interest income net of warehouse interest expense. Warehouse interest income is the interest earned from loans held for sale and loans held for investment. Generally, a substantial portion of our loans is financed with matched borrowings under one of our warehouse facilities. The remaining portion of loans not funded with matched borrowings is financed with our own cash. Occasionally, we also fully fund a small number of loans held for sale or loans held for investment with our own cash. Warehouse interest expense is incurred on borrowings used to fund loans solely while they are held for sale or for investment. Warehouse interest income and expense are earned or incurred on loans held for sale after a loan is closed and before a loan is sold. Warehouse interest income and expense are earned or incurred on loans held for investment after a loan is closed and before a loan is repaid. NOTE 7 of the consolidated financial statements provides additional details regarding our warehouse facilities.
Placement Fees and Other Interest Income. We earn fee income on property-level escrow deposits held on behalf of borrowers in our servicing portfolio, generally based on a fixed or variable placement fee negotiated with the financial institutions that hold the escrow deposits. Placement fees reflect the fees net of interest paid to the borrower, if required. Also included with placement fees and other interest income are interest earnings from our cash and cash equivalents and interest income earned on our pledged securities and other investments.
Other Revenues. Other revenues are comprised of fees for processing loan assumptions, prepayment fee income, application fees, appraisal revenues, income from equity-method investments, syndication, and certain other revenues from our LIHTC operations, and other miscellaneous revenues related to our operations.
Costs and Expenses
Personnel. Personnel expense includes the cost of employee compensation and benefits, which include fixed and discretionary amounts tied to company and individual performance, commissions, severance expense, signing and retention bonuses, and share-based compensation.
Amortization and depreciation. Amortization and depreciation is principally comprised of amortization of our MSRs, net of amortization of our guaranty obligations. The MSRs are amortized using the interest method over the period that servicing income is expected to be received. We amortize the guaranty obligations evenly over their expected lives. When the loan underlying an MSR prepays, we write-off the remaining unamortized balance, net of any related guaranty obligation, and record the write off to Amortization and depreciation . Similarly, when the loan underlying an MSR defaults, we write the MSR off to Amortization and depreciation . We depreciate property, plant, and equipment ratably over their estimated useful lives.
Amortization and depreciation also includes the amortization and write-off of intangible assets, principally related to the amortization of asset management fee contracts, research subscription contracts, intellectual property, and other intangible assets recognized in connection with acquisitions. For the years presented in the Consolidated Statements of Income, the amortization of intangible assets relates primarily to intangible assets associated with our acquisitions in 2021 and 2022.
Provision (benefit) for credit losses. The provision (benefit) for credit losses consists primarily of the provision associated with our risk-sharing loans, including pre-securitized Freddie Mac SBL loans. The provision (benefit) for credit losses associated with risk-sharing loans is estimated on a collective basis when a loan is sold to Fannie Mae and is based on our current expected credit losses on the current portfolio from loan sale to maturity. When a loan is probable of default (in foreclosure) and thus collateral dependent, the loan is taken out of the collective evaluation and individually evaluated for credit losses. Our estimates of property fair value are based on appraisals, broker opinions of value, or net operating income and market capitalization rates, whichever we believe is the best estimate of the net disposition value.
The “Critical Accounting Estimates” section above and NOTE 2 of the consolidated financial statements provide additional details of the accounting for the provision (benefit) for credit losses associated with our at-risk servicing portfolio.
Interest expense on corporate debt. Interest expense on corporate debt includes interest expense from our term debt, which includes the term loan and any additional borrowings under that agreement, and borrowings of a subsidiary associated with our LIHTC operations and amortization of debt discount and deferred debt issuance costs primarily related to our term loan and incremental term loan. NOTE 7 of the consolidated financial statements provides additional details of our term debt.
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Goodwill impairment. Goodwill impairment is the write-down of our goodwill balance resulting from either our annual impairment testing or our quarterly evaluations of recoverability.
The “Critical Accounting Estimates” section above and NOTE 2 of the consolidated financial statements provide additional details of the accounting for this expense.
Fair value adjustments to contingent consideration liabilities. Fair value adjustments to our contingent consideration liabilities are the adjustments to the estimated fair value of our contingent consideration liabilities remeasured at the end of each reporting period. As noted below, the accretion of contingent consideration liabilities is included in other operating expenses.
NOTE 9 of the consolidated financial statements provide additional details of the accounting for this expense.
Indemnified and repurchased loan expenses. Indemnified and repurchased loan expenses include the expected principal losses on loan repurchases (“loan repurchase losses”), the initial loan repurchase costs, and indemnified and repurchased loans operating costs related to repurchased loans. The loan repurchase losses represent the estimated losses of principal from indemnifying the loan. The initial loan repurchase costs are composed of any indemnifiable legal costs, reimbursed interest, and prepayment costs associated with repurchasing a loan. The indemnified and repurchased loans operating costs are expenses we incur in operating and/or maintaining the loan and/or property collateralizing the loan.
NOTE 2 and NOTE 5 of the consolidated financial statements provide additional details of the accounting for this expense.
Asset impairments and other expenses. Asset impairments and other expenses consist of asset impairments of investments, write-offs of unamortized deferred issuance costs associated with repayments of our corporate debt, costs associated with corporate investigations and other professional fees driven by specific individual events.
Other operating expenses. Other operating expenses include facilities costs, travel and entertainment costs, marketing costs, professional fees, accretion of contingent consideration liabilities, corporate insurance premiums, software costs, and other general and administrative expenses.
Income tax expense. The Company is a C-corporation subject to federal, state, and international corporate tax. Our estimated combined statutory federal, state, and international tax rate was 25.1%, 25.1%, and 26.1% for the years ended December 31, 2025, 2024, and 2023, respectively. Except for the effects of the Tax Cuts and Jobs Act of 2017 (“Tax Reform”), our combined statutory tax rate has historically not varied significantly as the only material difference in the calculation of the combined statutory tax rate from year to year is the apportionment of our taxable income among the various states where we are subject to taxation since our foreign operations are (i) insignificant and (ii) taxed at a rate similar to our blended federal and state tax rate. Absent additional significant legislative changes to statutory tax rates (particularly the federal tax rate), we expect low deviation from the 2025 combined statutory tax rate for future years. However, we do expect some variability in the effective tax rate going forward due to excess tax benefits and shortfalls recognized and limitations on the deductibility of certain book expenses as a result of Tax Reform, primarily related to executive compensation.
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Consolidated Results of Operations
The following is a discussion of the comparison of our results of operations for the years ended December 31, 2025 and 2024. The financial results are not necessarily indicative of future results. Our annual results have fluctuated in the past and are expected to fluctuate in the future, reflecting the interest-rate environment, the volume of transactions, business acquisitions, regulatory actions, and general economic conditions. Discussions of our results of operations and comparisons between 2024 and 2023 can be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 10-K for the year ended December 31, 2024.
SUPPLEMENTAL OPERATING DATA
CONSOLIDATED
Transaction Volume (in thousands)
Debt Financing Volume
Property Sales Volume
Total Transaction Volume
Key Performance Metrics (dollars in thousands, except per share data)
Operating margin
Return on equity
Walker & Dunlop net income
Adjusted EBITDA (1)
Diluted EPS
Key Expense Metrics (as a percentage of total revenues)
Personnel expenses
Other operating expenses
As of December 31,
Managed Portfolio (in thousands)
Servicing Portfolio
Assets under management
Total Managed Portfolio
This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measure.”
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Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The following table presents a year-over-year comparison of our financial results for the years ended December 31, 2025 and 2024.
FINANCIAL RESULTS –2025 COMPARED TO 2024 CONSOLIDATED
December 31,
Dollar
Percentage
(in thousands)
Change
Change
Revenues
Loan origination and debt brokerage fees, net
Fair value of expected net cash flows from servicing, net of guaranty obligation
Servicing fees
Property sales broker fees
Investment management fees
Net warehouse interest income (expense)
Placement fees and other interest income
Other revenues
Total revenues
Expenses
Personnel
Amortization and depreciation
Provision (benefit) for credit losses
Interest expense on corporate debt
Goodwill impairment
Fair value adjustments to contingent consideration liabilities
Indemnified and repurchased loan expenses
Asset impairments and other expenses
Other operating expenses
Total expenses
Income before taxes
Income tax expense
Net income before noncontrolling interests
Less: net income (loss) from noncontrolling interests
Less: net income (loss) attributable to temporary equity holders
Walker & Dunlop net income
Overview
Total transaction volume growth of 37% was the principal driver of revenue growth in 2025. Transaction related revenues—loan origination and debt brokerage fees, net (“origination fees”) plus the fair value of expected net cash flows from servicing, net of guaranty obligations (“MSR income”) plus property sales broker fees—increased 23% year over year. Revenues grew at a slower pace than transaction volumes principally due to lower non-cash MSR income on our new Fannie Mae loan originations. This was driven by two factors: (i) a portion of our volume in 2025 was driven by larger portfolio transactions which earn lower servicing fees as a percentage of loan volume and (ii) the weighted average servicing fees and loan terms—two key inputs that drive the estimated fair value of MSR income—for new loans were lower year over year. Borrowers have consistently been opting for shorter duration loans since interest rates began rising sharply in 2022, and that trend continued in 2025. Growth in transaction volume supported 6% growth in our loan servicing portfolio, to $144.0 billion at December 31, 2025. Growth in the loan servicing portfolio drove the 4% growth in servicing fees year on year, which was offset, however, by the decline in placement fees and other interest income. Placement fees are closely correlated to short-term interest rates, and the decline in short-term interest rates throughout 2025 drives the 9% decline in placement fees and other interest income. Other revenues decreased primarily due to a discreet transaction. In 2024, we sold an asset held within our affordable operating subsidiary that generated a gain in 2024 that was included in Other revenues with no comparable activity in 2025. The decline in Other revenues was partially offset by an increase in investment banking revenues and prepayment fees, and various other revenue categories.
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The increase in expenses was due to increases in personnel costs, indemnified and repurchased loan expenses, and asset impairments and other expenses, and lower fair value adjustments to contingent consideration liabilities, partially offset by lower goodwill impairment, and a decrease in interest expense on corporate debt. Personnel costs increased, largely due to increases in variable compensation costs for our salespeople as a result of our higher transaction volumes and salaries and benefits due to higher average headcount. Indemnified and repurchased loan expenses increased due to increases in loan repurchase losses and repurchased loan operating costs. Asset impairments and other expenses increased largely due to our strategic decision to sell asset management contracts and interests in assets held within one of our affordable operating subsidiaries. The expected sales prices were below current carrying values in many instances resulting in an impairmentloss. There was also an increase in write off of unamortized premium from corporate debt repayment. Interest expense on corporate debt decreased due to lower average interest rates during 2025 compared to 2024, partially offset by an increase in the balance outstanding from the refinancing of our debt. Goodwill impairment decreased due to an impairment in 2024 with no comparable activity in 2025. Fair value adjustments to contingent consideration decreased primarily due to a larger adjustment in 2024 due to the challenging market conditions related to one of our reporting units that impacted the estimated fair value of future earnout payments without a similar adjustment to the earnout for that reporting unit in 2025.
Income Tax Expense. The decrease in income tax expense primarily relates to a 40% decrease in income before taxes, partially offset by a decrease in excess tax benefits. We recognized excess tax shortfalls of $1.4 million in 2025 compared to excess tax benefits of $1.7 million in 2024.
Net Income (Loss) from Noncontrolling Interests. The decrease in losses attributed to noncontrolling interests is largely the result of a change in the ownership of an entity producing losses in 2024. As part of a larger transaction with the noncontrolling interest holder, we regained full control of the entity at the end of 2024. The remaining noncontrolling interests in 2025 are insignificant.
A discussion of the financial results for our segments is included further below.
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with GAAP, we use adjusted EBITDA, a non-GAAP financial measure. The presentation of adjusted EBITDA is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. When analyzing our operating performance, readers should use adjusted EBITDA in addition to, and not as an alternative for, net income. Adjusted EBITDA represents net income before income taxes, interest expense on our corporate debt, and amortization and depreciation, adjusted for provision (benefit) for credit losses, net write-offs based on the final resolution of the defaulted loans or collateral, loan repurchase losses, stock-based compensation, the fair value of expected net cash flows from servicing, net of guaranty obligation, the write off of unamortized balance of deferred issuance costs associated with the repayment of a portion of our corporate debt, goodwill impairment, and contingent consideration liability fair value adjustments when the fair value adjustment is a triggering event for a goodwill impairment assessment. In cases where the fair value adjustment of contingent consideration liabilities is a trigger for goodwill impairment, the goodwill impairment is netted against the fair value adjustment of contingent consideration liabilities and included as a net number. Because not all companies use identical calculations, our presentation of adjusted EBITDA may not be comparable to similarly titled measures of other companies. Furthermore, adjusted EBITDA is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not reflect certain cash requirements such as tax and debt service payments. The amounts shown for adjusted EBITDA may also differ from the amounts calculated under similarly titled definitions in our debt instruments, which are further adjusted to reflect certain other cash and non-cash charges that are used to determine compliance with financial covenants.
We use adjusted EBITDA to evaluate the operating performance of our business, for comparison with forecasts and strategic plans, and for benchmarking performance externally against competitors. We believe that this non-GAAP measure, when read in conjunction with our GAAP financials, provides useful information to investors by offering:
the ability to make more meaningful period-to-period comparisons of our ongoing operating results;
the ability to better identify trends in our underlying business and perform related trend analyses; and
a better understanding of how management plans and measures our underlying business.
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We believe that adjusted EBITDA has limitations in that it does not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP and that adjusted EBITDA should only be used to evaluate our results of operations in conjunction with net income on both a consolidated and segment basis. Adjusted EBITDA is reconciled to net income as follows:
ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP
CONSOLIDATED
For the year ended
December 31,
(in thousands)
Reconciliation of Walker & Dunlop Net Income to Adjusted EBITDA
Walker & Dunlop Net Income
Income tax expense
Interest expense on corporate debt
Amortization and depreciation
Provision (benefit) for credit losses
Loan repurchase losses (1)
Net write-offs
Stock-based compensation expense
Goodwill impairment, net of contingent consideration liability fair value adjustments (2)
Write-off of unamortized issuance costs from corporate debt paydown (3)
MSR income
Adjusted EBITDA
Presented as a component of Indemnified and repurchased loan expenses on the Consolidated Statements of Income.
For the year ended December 31, 2024, includes goodwill impairment of $33.0 million and contingent consideration fair value adjustments of $34.5 million, with no comparable activity for the year ended December 31, 2025.
Presented as a component of Asset impairments and other expenses on the Consolidated Statements of Income.
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
The following table presents a year-over-year comparison of the components of our adjusted EBITDA for the year ended December 31, 2025 and 2024:
ADJUSTED EBITDA–2025 COMPARED TO 2024
CONSOLIDATED
For the year ended
December 31,
Dollar
Percentage
(in thousands)
Change
Change
Loan origination and debt brokerage fees, net
Servicing fees
Property sales broker fees
Investment management fees
Net warehouse interest income (expense)
Placement fees and other interest income
Other revenues
Personnel
Net write-offs
Indemnified and repurchased loan expenses
Asset impairments and other expenses
Other operating expenses (1)
Net income (loss) from noncontrolling interests and temporary equity holders
Adjusted EBITDA
Other operating expenses includes a beneficial adjustment for the fair value of contingent consideration liability not related to a goodwill impairment triggering event of $8.2 million and $15.8 million for the years ended December 31, 2025 and 2024, respectively.
The increase in origination fees was primarily related to an increase in the overall debt financing volumes year over year. Servicing fees
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increased mainly due to an increase in the average balance of the servicing portfolio. Property sales broker fees increased largely as a result of an increase in property sales volume year over year. Placement fees and other interest income decreased primarily as a result of lower average fee arrangements with our financial partners. Other revenues decreased primarily due to a decrease in the gain on sale of an asset in our affordable operations in 2024 with no comparable activity in 2025, partially offset by an increase in investment banking revenues, prepayment fees, and various other revenue categories. Personnel costs increased largely due to increases in variable compensation costs for our salespeople as a result of our higher transaction volumes and salaries and benefits due to higher average headcount. Indemnified and repurchased loan expenses increased due to an increase in repurchase costs and repurchased loan operating costs. Asset impairment and other expenses increased due to increases in asset impairments and investment charges. The decrease in losses attributed to noncontrolling interests is largely the result of a change in the ownership of an entity producing losses in 2024. As part of a larger transaction with the noncontrolling interest holder, we regained full control of the entity at the end of 2024. The remaining noncontrolling interests in 2025 are insignificant.
Financial Condition
Cash Flows from Operating Activities
Our cash flows from operating activities are generated from loan sales, servicing fees, placement fees, net warehouse interest income (expense), property sales broker fees, investment management fees, research subscription fees, investment banking advisory fees, and other income, net of loan origination and operating costs. Our cash flows from operating activities are impacted by the fees generated by our loan originations and property sales, the timing of loan closings, and the period of time loans are held for sale in the warehouse loan facility prior to delivery to the investor.
Cash Flows from Investing Activities
We usually lease facilities and equipment for our operations. Our cash flows from investing activities include the funding and repayment of loans held for investment, including repurchased loans, contributions to and distributions from joint ventures, purchases of equity-method investments, cash paid for acquisitions, and the purchase of available-for-sale (“AFS”) securities pledged to Fannie Mae.
Cash Flows from Financing Activities
We use our warehouse loan facilities and, when necessary, our corporate cash to fund loan closings, both for loans held for sale and loans held for investment. We believe that our current warehouse loan facilities are adequate to meet our loan origination needs. Historically, we used a combination of long-term debt and cash flows from operating activities to fund large acquisitions. Additionally, we repurchase shares, pay cash dividends, make long-term debt principal payments, and repay short-term borrowings on a regular basis. We issue stock primarily in connection with the exercise of stock options and occasionally for acquisitions (non-cash transactions).
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Years Ended December 31, 2025 Compared to Years Ended December 31, 2024
The following table presents a year-over-year comparison of the significant components of cash flows for the year ended December 31, 2025 and 2024.
SIGNIFICANT COMPONENTS OF CASH FLOWS – 2025 COMPARED TO 2024
CONSOLIDATED
For the year ended December 31,
Dollar
Percentage
(in thousands)
Change
Change
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Total of cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period ("Total cash")
Cash flows from (used in) operating activities
Net receipt (use) of cash for loan origination activity
Net cash provided by (used in) operating activities, excluding loan origination activity
Cash flows from (used in) investing activities
Capital invested in equity-method investments
Principal collected on loans held for investment
Purchases of pledged AFS securities, net of proceeds from prepayments
Originations and repurchase of loans held for investment
Other investing activities, net
Cash flows from (used in) financing activities
Borrowings (repayments) of warehouse notes payable, net
Repayments of interim warehouse notes payable
Borrowings of corporate notes payable
Repayments of corporate notes payable
Payment of contingent consideration
Debt issuance costs
Operating Activities
Cash provided by (used in) operating activities changed due to:
Loan origination activity . Agency loans originated are held for short periods of time, generally less than 60 days, and impact cash flows presented as of a point in time due to the timing difference between the date of origination and date of delivery. The increase in net cash used in loan origination activities is primarily attributable to originations outpacing sales by $833.8 million in 2025 compared to $23.6 million in 2024.
Other activities . Cash flows provided by other operating activities were $169.5 million in 2025, up from $153.0 million in 2024. The primary reasons for the change were a smaller reduction in cash from changes in other assets and receivables of $58.1 million, a decrease in the adjustments for fair value adjustments to contingent consideration liabilities of $42.1 million and an increase in the adjustment for loan repurchase losses of $20.1 million, partially offset by a $44.0 million decrease in net income before noncontrolling interests and temporary equity holders, a $26.1 million increase in adjustments for MSR income, and a $33.0 million decrease in the adjustment for goodwill impairment.
Investing Activities
Cash provided by (used in) investing activities changed due to:
Capital invested in equity-method investments: Capital invested in equity-method investments increased as we received more capital calls on our equity method investments in 2025 than in 2024.
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Principal collected on loans held for investment. The principal collected on loans held for investment decreased, as we have been winding down our Interim Loan Program (“ILP”) loans over the past several years as our transitional lending opportunities have been funded using third-party capital raised by our investment management business, WDIP. As of the beginning of 2025, we had no ILP loans on our balance sheet, compared to two loans as of the beginning of 2024.
(iii)
Other investing activities, net. The decrease in cash provided was primarily due to a decrease in distributions from our Interim Program JV as the JV is winding down.
Partially offsetting the aforementioned changes that decreased cash were the following activities that increased cash:
AFS securities . Prepayment of AFS securities increased in 2025, while purchases declined slightly during the year.
Originations and repurchase of loans held for investment. The decrease was primarily due to the origination of a short-term bridge loan in 2024 with no comparable activity in 2025.
Financing Activities
Cash provided by (used in) financing activities changed due to:
Net borrowings of warehouse notes payable. The increase was due to the aforementioned increase in net cash used in loan origination activity.
Repayments of interim warehouse notes payable. The change in repayments of interim warehouse notes payable was related to the aforementioned decrease in principal collected on loans held for investment as we use borrowings to fund interim loan program loans held for investment. Due to no loans held for investment under our interim loan program outstanding in 2025, we also had no outstanding borrowings to repay.
(iii)
Borrowings of corporate notes payable. The increase was attributable to the issuance of our Senior Notes in 2025 to pay down our Term Loan, with no comparable activity in 2024.
Payment of contingent consideration. The decrease was due to lower achievement of performance-based earnouts related to historical acquisitions in 2025 compared to 2024.
Partially offsetting the aforementioned changes that increased cash were the following activities that decreased cash:
Repayments of corporate notes payable. The increase was largely due to using $328.5 million of the $400.0 million proceeds from the issuance of our Senior Notes to pay down our Term Loan in 2025, with no comparable activity in 2024.
Debt issuance costs. The increase in debt issuance costs paid was driven by the aforementioned issuance of the Senior Notes and amendment of the Term Loan, with no comparable activity in 2 024.
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Segment Results
The Company is managed based on our three reportable segments: (i) Capital Markets (“CM”), (ii) Servicing & Asset Management (“SAM”), and (iii) Corporate. The segment results below are intended to present each of the reportable segments on a stand-alone basis.
Capital Markets
Our CM segment provides a comprehensive range of commercial real estate finance products to our customers, including Agency lending, debt brokerage, property sales, and appraisal and valuation services. The Company’s long-established relationships with the Agencies and institutional investors enable our CM segment to offer a broad range of loan products and services to the Company’s customers, including first mortgage, second trust, supplemental, construction, mezzanine, preferred equity, and small-balance loans. This segment also provides property sales services to owners and developers of multifamily properties and commercial real estate and multifamily property appraisals for various lenders and investors. The CM segment also provides real estate-related investment banking and advisory services, including housing market research.
SUPPLEMENTAL OPERATING DATA
CAPITAL MARKETS
For the year ended
Transaction Volume (in thousands)
December 31,
Dollar
Percentage
Components of Debt Financing Volume
Change
Change
Fannie Mae
Freddie Mac
Ginnie Mae ̶ HUD
Brokered (1)
Total Debt Financing Volume
Property sales volume
Total Transaction Volume
Key Performance Metrics (dollars in thousands, except per share data)
Net income
Adjusted EBITDA (2)
Diluted EPS
Operating margin
Key Revenue Metrics (as a percentage of debt financing volume)
Origination fees
MSR income, as a percentage of Agency debt financing volume
Brokered transactions for life insurance companies, commercial banks, and other capital sources.
This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measure.”
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FINANCIAL RESULTS–2025 COMPARED TO 2024
CAPITAL MARKETS
For the year ended
(in thousands)
December 31,
Dollar
Percentage
Revenues
Change
Change
Origination fees
MSR income
Property sales broker fees
Net warehouse interest income (expense), loans held for sale
Other revenues
Total revenues
Expenses
Personnel
Amortization and depreciation
Interest expense on corporate debt
Goodwill impairment
Fair value adjustments to contingent consideration liabilities
Asset impairments and other expenses
Other operating expenses
Total expenses
Income (loss) before taxes
Income tax expense (benefit)
Net income (loss) before noncontrolling interests
Less: net income (loss) from noncontrolling interests
Less: net income (loss) attributable to temporary equity holders
Net income (loss)
Revenues
Origination fees and MSR Income. The following tables provide additional information that helps explain changes in origination fees and MSR income year over year:
For the year ended December 31,
Debt Financing Volume by Product Type
Fannie Mae
Freddie Mac
Ginnie Mae - HUD
Brokered
For the year ended December 31,
Basis Point
Percentage
Mortgage Banking Details (basis points)
Change
Change
Origination Fee Rate (1)
Agency MSR Rate (2)
Origination fees as a percentage of total debt financing volume.
MSR Income as a percentage of Agency debt financing volume.
The increase in origination fees was primarily the result of the 38% increase in debt financing volume, partially offset by a nine-basis-point decrease in our origination fee rate. The decrease in the origination fee rate was primarily attributable to our Freddie Mac debt financing volume, which had a 25% decline in origination fee rate year over year. During 2025, 52% of Freddie Mac debt financing volume was for loans with balances of $50 million or greater compared to 31% in 2024. Additionally, we originated a large Fannie Mae portfolio during the second quarter of 2025, with no comparable activity in 2024, contributing to the decline in origination fee rates. Large portfolios typically have lower origination fee rates than non-portfolio transactions.
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The increase in our MSR income was similarly primarily driven by the increase in Agency debt financing volume, partially offset by a 15% decrease in the weighted-average servicing fee (“WASF”), and a 7% decrease in the weighted average loan term on Fannie Mae debt financing volume. The WASF and weighted average loan term are two key inputs into the estimated fair value of MSR income. The decrease in the WASF was driven by (i) a competitive environment, and (ii) the aforementioned large Fannie Mae portfolio originated during the second quarter of 2025 as large portfolios typically have lower servicing fees than non-portfolio transactions. The decrease in the weighted average loan term is driven by our borrowers are opting for shorter loan terms for several reasons: (i) shorter duration loans have lower coupon rates than longer duration loans, all else equal, (ii) a lower cost of funds generally results in higher loan proceeds, and (iii) more institutional borrowers are matching loan duration with the duration of their limited partner equity capital, which is generally less than ten years. We expect loan terms to remain at the shorter end of historical ranges for the foreseeable future.
Property sales broker fees. The increase in property sales broker fees was driven principally by the 37% increase in the property sales volumes period over period.
Other revenues. The increase was principally due to a $5.8 million increase in investment banking revenues. Investment banking revenues increased primarily due to more M&A transactions in 2025 compared to 2024.
Expenses
Personnel. T he increase was primarily due to (i) a $64.3 million increase in commission costs resulting from increased origination fees, property sales broker fees, and investment banking revenues, (ii) a $10.1 million increase in salaries and benefits largely related to a 5% increase in average segment headcount, and (iii) a $3.2 million increase in severance expense largely as a result of the separation of several underperforming producers.
Interest expense on corporate debt. Interest expense on corporate debt is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s use of that corporate debt. The discussion of our consolidated results above has additional information related to the increase in interest expense on corporate debt.
Goodwill impairment. Goodwill impairment decreased as an impairment was recorded in 2024 without a similar impairment in 2025, due to improved performance of the reporting unit.
Fair value adjustments to contingent consideration liabilities . The decrease was driven by a decrease in the fair value adjustment to contingent consideration liabilities (“CCL”) related to an impaired reporting unit. In 2024, we wrote down to zero the CCL related to a large acquisition due to performance that lagged far behind the earnout targets. There was no comparable activity in 2025, and the earnout period expired on December 31, 2025 for that transaction so there will be no further adjustments to the CCL.
Income tax expense . Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income before taxes, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity.
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Non-GAAP Financial Measure
A reconciliation of adjusted EBITDA for our Capital Markets segment is presented below. Our segment level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure. CM adjusted EBITDA is reconciled to net income as follows:
ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP
CAPITAL MARKETS
For the year ended
December 31,
(in thousands)
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Net income (loss)
Income tax expense (benefit)
Interest expense on corporate debt
Amortization and depreciation
Stock-based compensation expense
Goodwill impairment, net of contingent consideration liability fair value adjustments (1)
Write-off of unamortized issuance costs from corporate debt paydown (2)
MSR income
Adjusted EBITDA
For the year ended December 31, 2024, included goodwill impairment of $33.0 million and contingent consideration fair value adjustment of $34.5 million, with no comparable activity for the year ended December 31, 2025.
Presented as a component of Asset impairments and other expenses on the Consolidated Statements of Income
The following table presents a year-over-year comparison of the components of CM adjusted EBITDA for the years ended December 31, 2025 and 2024.
ADJUSTED EBITDA – 2025 COMPARED TO 2024
CAPITAL MARKETS
For the year ended
December 31,
Dollar
Percentage
(in thousands)
Change
Change
Origination fees
Property sales broker fees
Net warehouse interest income (expense), loans held for sale
Other revenues
Personnel
Asset impairments and other expenses
Other operating expenses (1)
Net income (loss) from noncontrolling interests and temporary equity holders
Adjusted EBITDA
Other operating expenses included a beneficial adjustment for the fair value of contingent consideration liability not related to a goodwill impairment triggering event of $5.0 million for the year ended December 31, 2024, with no comparable activity for the year ended December 31, 2025.
Origination fees increased due to an increase in our overall debt financing volume, partially offset by a decrease in our origination fee rate. Property sales broker fees increased largely as a result of the growth in property sales volumes. Other revenues increased primarily due to an increase in investment banking revenues. The increase in personnel expense was primarily due to increased commission and other production incentive costs due to the increase in origination fees combined with an increase in salaries and benefits due to higher average headcount for the segment and increased severance expense. Other operating expenses decreased due to a beneficial adjustment to contingent consideration liabilities in 2024 with no comparable activity in 2025.
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Servicing & Asset Management
The SAM segment activities include: (i) servicing and asset-managing the portfolio of loans we (a) originate and sell to the Agencies, (b) broker to certain life insurance companies, and (c) originate through our principal lending and investing activities, and (ii) managing third-party capital invested in tax credit equity funds focused on the affordable housing sector and other commercial real estate.
SUPPLEMENTAL OPERATING DATA
SERVICING & ASSET MANAGEMENT
As of December 31,
Dollar
Percentage
Managed Portfolio (in thousands)
Change
Change
Components of Servicing Portfolio
Fannie Mae
Freddie Mac
Ginnie Mae–HUD
Brokered (1)
Total Servicing Portfolio
Assets under management
Total Managed Portfolio
For the year ended
(dollars in thousands, except per share data)
December 31,
Dollar
Percentage
Key Volume and Performance Metrics
Change
Change
Equity syndication volume (2)
Principal Lending and Investing debt financing volume (3)
Weighted-average remaining servicing portfolio term (years)
As of December 31,
(in thousands)
Components of equity and assets under management
Equity under management
Assets under management
Equity under management
Assets under management
LIHTC
Equity funds
Debt funds (5)
Total
Brokered loans serviced primarily for life insurance companies.
Amount of equity called and syndicated into LIHTC funds.
Comprised solely of WDIP separate account originations.
This is a non-GAAP financial measure. For more information on adjusted EBITDA, refer to the section below titled “Non-GAAP Financial Measure”.
As of December 31, 2025, included $36.5 million and $33.0 million of equity under management and assets under management, respectively, of Interim program JV loans. The remainder was composed of WDIP debt funds. As of December 31, 2024, includes $46.0 million and $173.0 million of equity under management and assets under management, respectively, of Interim program JV loans. The remainder was composed of WDIP debt funds.
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FINANCIAL RESULTS – 2025 COMPARED TO 2024
SERVICING & ASSET MANAGEMENT
For the year ended
December 31,
Dollar
Percentage
(in thousands)
Change
Change
Revenues
Origination fees
Servicing fees
Investment management fees
Net warehouse interest income, loans held for investment
Placement fees and other interest income
Other revenues
Total revenues
Expenses
Personnel
Amortization and depreciation
Provision (benefit) for credit losses
Interest expense on corporate debt
Fair value adjustments to contingent consideration liabilities
Indemnified and repurchased loan expenses
Asset impairments and other expenses
Other operating expenses
Total expenses
Income (loss) before taxes
Income tax expense (benefit)
Net income (loss) before noncontrolling interests
Less: net income (loss) from noncontrolling interests
Net income (loss)
Revenues
Servicing fees. The increase was entirely attributable to an increase in the average balance of the servicing portfolio period over period as shown below. The increase in the average servicing portfolio was driven primarily by the $4.5 billion and $3.4 billion increase in Fannie Mae and Freddie Mac loans serviced, respectively.
Servicing Fees Details (in thousands)
Change
Change
Average Servicing Portfolio
Average Servicing Fee (basis points)
Placement fees and other interest income. The decrease was driven primarily by a decrease in our placement fees on escrow deposits of $23.9 million, partially offset by a $7.8 million increase in interest income from short-term loans to our affordable joint ventures due to an increase in the balance of loans outstanding year over year. The primary driver in the decrease in placement fees was a decline in the placement fee rates on escrow deposits as a result of lower short-term interest rate environment in 2025 compared to 2024, partially offset by a slight increase in the average escrow balance year over year.
Other revenues. T he decrease was primarily due to a $23.2 million decrease from the sale of an asset in our affordable subsidiary in 2024 with no comparable activity in 2025, partially offset by a $5.6 million increase in prepayment fees. The increase in prepayment fees was primarily attributable to the higher refinancing volume within our servicing portfolio in 2025 compared to 2024 due to the more stable interest rate environment and macroeconomic environment for multifamily properties.
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Expenses
Personnel. The increase was primarily the result of increases in salaries and benefits and subjective bonuses of $3.8 million combined with a $1.7 million increase in severance expense. The increase in salaries, benefits and bonus were due to normal annual adjustments and an increase in the average segment headcount. Severance expenses increased primarily due to the separation of several underperforming producers.
Interest expense on corporate debt. Interest expense on corporate debt is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s use of that corporate debt. The discussion of our consolidated results above has additional information related to the increase in interest expense on corporate debt.
Indemnified and repurchased loan expenses. The increase was primarily driven by a $20.1 million increase in loan repurchase losses combined with a $10.2 million increase in repurchase costs and operating costs. As discussed in NOTE 5 of the consolidated financial statements, we received repurchase requests for two loan portfolios with an aggregate UPB of $100.0 million, and we believe that it is probable that we will receive an additional repurchase request for another $34.3 million of loans. In 2024, our repurchase requests were for an aggregate UPB that was less than 2025, resulting in smaller loan repurchase losses in 2024. Similarly, repurchase costs and repurchased loan operating costs increased due to the increase in repurchase request UPB.
Asset impairments and other expenses. The increase was primarily driven by (i) $26.1 million in investment impairments at one of our LIHTC subsidiaries due to continuing underperformance in the investments and (ii) a $2.5 million write off of unamortized debt issuance costs associated with the paydown of our corporate debt in 2025. The $26.1 million of investment impairments consisted of (i) $13.6 million of impairment of real estate held for use, (ii) $5.0 million of impairment of an equity-method investment, and (iii) a $7.5 million accrual for losses expected on disposition of certain affordable assets. All of the 2025 activity had minimal or no comparable activity in 2024.
Other operating expenses. The decrease was due to a $5.9 million decrease and a $3.0 million decrease in professional fees and miscellaneous expenses, respectively. The decrease in professional fees was driven by a decline in legal costs at our LIHTC subsidiary that are correlated with the declines in equity syndication volumes.
Income tax expense . Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income before taxes, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity.
Net Income (Loss) from Noncontrolling Interests. The decrease in losses attributed to noncontrolling interests is the result of a change in the ownership of an entity producing losses in 2024. As part of a larger transaction with the noncontrolling interest holder, we regained full control of the entity at the end of 2024. The remaining noncontrolling interests in 2025 are insignificant.
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Non-GAAP Financial Measure
A reconciliation of adjusted EBITDA for our SAM segment is presented below. Our segment level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure. SAM adjusted EBITDA is reconciled to net income as follows:
ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP
SERVICING & ASSET MANAGEMENT
For the year ended
December 31,
(in thousands)
Reconciliation of Net Income (loss) to Adjusted EBITDA
Net income (loss)
Income tax expense (benefit)
Interest expense on corporate debt
Amortization and depreciation
Provision (benefit) for credit losses
Loan repurchase losses (1)
Net write-offs
Stock-based compensation expense
Write-off of unamortized issuance costs from corporate debt paydown (2)
Adjusted EBITDA
Presented as a component of Indemnified and repurchased loan expenses on the Consolidated Statements of Income.
Presented as a component of Asset impairments and other expenses on the Consolidated Statements of Income.
The following table presents a year-over-year comparison of the components of SAM adjusted EBITDA for the years ended December 31, 2025 and 2024.
ADJUSTED EBITDA – 2025 COMPARED TO 2024
SERVICING & ASSET MANAGEMENT
For the year ended
December 31,
Dollar
Percentage
(in thousands)
Change
Change
Origination fees
Servicing fees
Investment management fees
Net warehouse interest income (expense), loans held for investment
Placement fees and other interest income
Other revenues
Personnel
Net write-offs
Indemnified and repurchased loan expenses
Asset impairments and other expenses
Other operating expenses (1)
Net income (loss) from noncontrolling interests
Adjusted EBITDA
Other operating expenses includes a beneficial adjustment for the fair value of contingent consideration liability not related to a goodwill impairment triggering event of $8.2 million and $10.8 million for the year ended December 31, 2025 and 2024, respectively.
Servicing fees increased due to growth in the average balance of the servicing portfolio period over period as a result of loan originations. Placement fees and other interest income decreased primarily due to decrease in the placement fee rate due to the interest rate environment, partially offset by an increase in interest income from short-term loans to our affordable joint ventures. Other revenues decreased primarily due to the gain on equity method investments from the sale of a property in a fund in 2024 with no comparable activity in 2025. Personnel increased primarily due to an increase in salaries and benefit costs and subjective bonus compensation due primarily to an increase in average segment
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headcount. Indemnified and repurchased loan expenses increased due to an increase in repurchase costs and operating costs. Asset impairments and other expenses increased primarily due to investment impairments taken in 2025.
Corporate
The Corporate segment consists primarily of the Company’s treasury operations and other corporate-level activities. Our treasury activities include monitoring and managing liquidity and funding requirements, including corporate debt. Other corporate-level activities include equity-method investments, accounting, information technology, legal, human resources, marketing, internal audit, and various other corporate groups (“support functions”). We do not allocate costs from these support functions to its other segments in presenting segment operating results. We do allocate interest expense and income tax expense. Corporate debt and the related interest expense are allocated first based on specific acquisitions where debt was directly used to fund the acquisition, such as the acquisition of Alliant, and then based on the remaining segment assets. Income tax expense is allocated proportionally based on income before taxes at each segment, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity.
FINANCIAL RESULTS – 2025 COMPARED TO 2024
CORPORATE
For the year ended
December 31,
Dollar
Percentage
(in thousands)
Change
Change
Revenues
Other interest income
Other revenues
Total revenues
Expenses
Personnel
Amortization and depreciation
Interest expense on corporate debt
Asset impairments and other expenses
Other operating expenses
Total expenses
Income (loss) before taxes
Income tax expense (benefit)
Net income (loss)
Diluted EPS
Adjusted EBITDA
Revenues
Other revenues. The increase was primarily due to a change to income from equity method investments in 2025 compared to loss from equity method investments in 2024.
Expenses
Personnel. T he increase was primarily the result of a $10.7 million increase in salaries and benefits, partially offset by a $4.5 million decrease in subjective bonuses. The increase in salaries and benefits was mostly driven by the 11% increase in average segment headcount year over year to support the growth of the business, particularly in emerging markets, and our technology strategy. The decrease in subjective bonus compensation was primarily due to our financial performance.
Asset impairments and other expenses. The increase was driven by increased legal and other professional fees related to company investigations into repurchased or indemnified loans, and third-party due diligence costs associated with an acquisition that did not close.
Other operating expenses. The increase was driven by a $2.6 million increase in software expense to support the Company’s growth in 2025, a $1.2 million increase in travel and entertainment, and a $1.0 million increase in marketing costs.
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Income tax expense. Income tax expense is determined at a consolidated corporate level and allocated to each segment proportionally based on each segment’s income before taxes, except for significant, one-time tax activities, which are allocated entirely to the segment impacted by the tax activity.
Non-GAAP Financial Measure
A reconciliation of adjusted EBITDA for our Corporate segment is presented below. Our segment level adjusted EBITDA represents the segment portion of consolidated adjusted EBITDA. A detailed description and reconciliation of consolidated adjusted EBITDA is provided above in our Consolidated Results of Operations—Non-GAAP Financial Measure. Corporate adjusted EBITDA is reconciled to net income as follows:
ADJUSTED FINANCIAL MEASURE RECONCILIATION TO GAAP
CORPORATE
For the year ended
December 31,
(in thousands)
Reconciliation of Net Income (loss) to Adjusted EBITDA
Net income (loss)
Income tax expense (benefit)
Interest expense on corporate debt
Amortization and depreciation
Stock-based compensation expense
Write-off of unamortized issuance costs from corporate debt paydown (1)
Adjusted EBITDA
Presented as a component of Asset impairments and other expenses on the Consolidated Statements of Income.
The following table presents a year-over-year comparison of the components of Corporate adjusted EBITDA for the years ended December 31, 2025 and 2024.
ADJUSTED EBITDA – 2025 COMPARED TO 2024
CORPORATE
For the year ended
December 31,
Dollar
Percentage
(in thousands)
Change
Change
Other interest income
Other revenues
Personnel
Asset impairments and other expenses
Other operating expenses
Adjusted EBITDA
Other revenues increased due to an increase in income from equity method investments. The increase in personnel expense was primarily due to increased salaries and benefits expense due to an increase in average segment headcount during 2025, partially offset by a decrease in subjective bonuses due to our financial performance. Asset impairments and other expenses increased due to increased legal and professional fees. Other operating expenses increased largely as a result of increased software costs and travel and entertainment expense.
Liquidity and Capital Resources
Uses of Liquidity, Cash and Cash Equivalents
Our significant recurring cash flow requirements consist of liquidity to (i) fund loans held for sale; (ii) pay cash dividends; (iii) fund our portion of the equity necessary to support equity-method investments; (iv) fund investments in properties to be syndicated to LIHTC investment funds that we will asset-manage; (v) make payments related to earnouts from acquisitions, (vi) meet working capital needs to support our day-to-day operations, including debt service payments, joint venture development partnership contributions, advances for servicing, loan repurchases, and payments for salaries, commissions, and income taxes, and (vii) meet working capital to satisfy collateral requirements for
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our Fannie Mae DUS risk-sharing obligations and to meet the operational liquidity requirements of Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders.
Fannie Mae has established benchmark standards for capital adequacy and reserves the right to terminate our servicing authority for all or some of the portfolio if, at any time, it determines that our financial condition is not adequate to support our obligations under the DUS agreement. We are required to maintain acceptable net worth as defined in the standards, and we satisfied the requirements as of December 31, 2025. The net worth requirement is derived primarily from unpaid balances on Fannie Mae loans and the level of risk-sharing. As of December 31, 2025, the net worth requirement was $350.4 million, and our net worth was $1.0 billion, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC. As of December 31, 2025, we were required to maintain at least $69.7 million of liquid assets to meet our operational liquidity requirements for Fannie Mae, Freddie Mac, HUD, Ginnie Mae, and our warehouse facility lenders. As of December 31, 2025, we had operational liquidity of $290.6 million, as measured at our wholly owned operating subsidiary, Walker & Dunlop, LLC.
We paid a cash dividend of $0.67 per share each quarter of 2025, which is 3% higher than the quarterly dividend paid in each quarter of 2024. Over the past three years, we have returned $265.3 million to investors through cash dividend payments. In February 2026, the Company’s Board of Directors declared a dividend of $0.68 per share for the first quarter of 2026, a 1.5% increase over the 2025 quarterly dividend. The dividend will be paid on March 27, 2026 to all holders of record of our restricted and unrestricted common stock as of March 13, 2026.
Additionally, over the past three years, we have invested $72.8 million in acquisitions, primarily through the payment of earnouts related to acquisitions that closed in 2021 and 2022. We continually seek opportunities to complete additional acquisitions if we believe the economics are favorable. Over the past two years, we have also used $75.2 million to fund loan repurchases with the GSEs.
In February 2025, our Board of Directors approved a stock repurchase program that permitted the repurchase of up to $75.0 million of shares of our common stock over a 12-month period beginning February 21, 2025. Through December 31, 2025, we did not repurchase any shares under the 2025 stock repurchase program and had $75.0 million of remaining capacity under that program. In February 2026, our Board of Directors again approved a stock repurchase program that permits the repurchase of up to $75.0 million shares of our common stock over a 12-month period beginning February 26, 2026.
We have contractual obligations to make future cash payments on lease agreements on our various offices of $127.4 million over the next 11 years as of December 31, 2025. NOTE 15 in the consolidated financial statements contains additional details related to future lease payments. We have contractual obligations to repay short-term and long-term debt. The total principal balance for such debt was $2.3 billion as of December 31, 2025, of which $1.4 billion will be repaid with the proceeds from the sale of loans held for sale. NOTE 7 in the consolidated financial statements contains additional details related to these future debt payments. The expected interest associated with long-term debt obligations is $62.2 million in 2026, $51.6 million in 2027, $51.3 million in 2028, $51.1 million in 2029, and $50.9 million in 2030. The future interest for long-term debt is based on a variable rate; therefore, the preceding interest payments are calculated based on the effective interest rate as of December 31, 2025.
Historically, our cash flows from operations and warehouse facilities have been sufficient to enable us to meet our short-term liquidity needs and other funding requirements. We believe that cash flows from operations will continue to be sufficient for us to meet our current obligations for the foreseeable future.
Restricted Cash and Pledged Securities
Restricted cash consists primarily of good faith deposits held on behalf of borrowers between the time we enter into a loan commitment with the borrower and the investor purchases the loan. We are generally required to share the risk of any losses associated with loans sold under the Fannie Mae DUS program, which is an off-balance sheet arrangement. We are required to secure this obligation by assigning collateral to Fannie Mae. We meet this obligation by assigning pledged securities to Fannie Mae. The amount of collateral required by Fannie Mae is a formulaic calculation at the loan level and considers the balance of the loan, the risk level of the loan, the age of the loan, and the level of risk-sharing. Fannie Mae requires collateral for Tier 2 loans of 75 basis points, which is funded over a 48-month period that begins upon delivery of the loan to Fannie Mae. Collateral held in the form of money market funds holding U.S. Treasuries is discounted 5%, and Agency mortgage-backed securities (“MBS”) are discounted 4% for purposes of calculating compliance with the collateral requirements. As of December 31, 2025, we held substantially all of our restricted liquidity in Agency MBS in the aggregate amount of $202.7 million. Additionally, the majority of the loans for which we have risk-sharing are Tier 2 loans. We fund any growth in our Fannie Mae required operational liquidity and collateral requirements from our working capital.
We are in compliance with the December 31, 2025 collateral requirements as outlined above. As of December 31, 2025, reserve requirements for the December 31, 2025 DUS loan portfolio will require us to fund $99.7 million in additional restricted liquidity over the next 48 months, assuming no further principal paydowns, prepayments, or defaults within our at-risk portfolio. Fannie Mae has assessed the DUS
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Capital Standards in the past and may make changes to these standards in the future. We generate sufficient cash flows from our operations to meet these capital standards and do not expect any future changes to have a material impact on our future operations; however, any future changes to collateral requirements may adversely impact our available cash.
Under the provisions of the DUS agreement, we must also maintain a certain level of liquid assets referred to as the operational and unrestricted portions of the required reserves each year. We satisfied these requirements as of December 31, 2025.
Sources of Liquidity: Warehouse Facilities and Corporate Notes Payable
Warehouse Facilities
We utilize a combination of warehouse facilities and notes payable to provide funding for our operations. We utilize warehouse facilities to fund our Agency Lending. Our ability to originate Agency mortgage loans depends upon our ability to secure and maintain these types of financing agreements on acceptable terms. For a detailed description of the terms of each warehouse agreement including the affirmative and negative covenants, refer to “Warehouse Facilities” in NOTE 7 of the consolidated financial statements.
Corporate Notes Payable
For a detailed description of the terms of our various corporate debt instruments and related amendments , refer to “Corporate notes payable” in NOTE 7 of the consolidated financial statements.
The warehouse notes payable and corporate notes payable are subject to various financial covenants. The Company is in compliance with all of these financial covenants as of December 31, 2025.
Credit Quality, Allowance for Risk-Sharing Obligations, and Loan Repurchases
The following table sets forth certain information useful in evaluating our credit performance.
December 31,
Key Credit Metrics (in thousands)
Risk-sharing servicing portfolio:
Fannie Mae Full Risk
Fannie Mae Modified Risk
Freddie Mac Modified Risk
Total risk-sharing servicing portfolio
Non-risk-sharing servicing portfolio:
Freddie Mac No Risk
GNMA - HUD No Risk
Brokered
Total non-risk-sharing servicing portfolio
Total loans serviced for others
Loans held for investment (full risk)
Indemnification reserves
Interim Program JV Managed Loans (1)
At-risk servicing portfolio (2)
Maximum exposure to at-risk portfolio (3)
Defaulted loans (4)
Defaulted loans as a percentage of the at-risk portfolio
Allowance for risk-sharing as a percentage of the at-risk portfolio
Allowance for risk-sharing as a percentage of maximum exposure
As of December 31, 2025 and 2024, this balance consisted entirely of Interim Program JV managed loans. We indirectly share in a portion of the risk of loss associated with Interim Program JV managed loans through our 15% equity ownership in the Interim Program JV which was $5.5 million and $6.9 million at December 31, 2025 and 2024, respectively. We have no exposure to risk of loss for the loans serviced directly for the Interim Program JV partner. The balance of this line is included as a component of assets under management in the Supplemental Operating Data table above.
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At-risk servicing portfolio is defined as the balance of Fannie Mae DUS loans subject to the risk-sharing formula described below, as well as a small number of Freddie Mac loans on which we share in the risk of loss. Use of the at-risk portfolio provides for comparability of the full risk-sharing and modified risk-sharing loans because the provision and allowance for risk-sharing obligations are based on the at-risk balances of the associated loans. Accordingly, we have presented the key statistics as a percentage of the at-risk portfolio.
For example, a $15 million loan with 50% risk-sharing has the same potential risk exposure as a $7.5 million loan with full DUS risk sharing. Accordingly, if the $15 million loan with 50% risk-sharing were to default, we would view the overall loss as a percentage of the at-risk balance, or $7.5 million, to ensure comparability between all risk-sharing obligations. To date, substantially all of the risk-sharing obligations that we have settled have been from full risk-sharing loans.
Represents the maximum loss we would incur under our risk-sharing obligations if all of the loans we service, for which we retain some risk of loss, were to default and all of the collateral underlying these loans was determined to be without value at the time of settlement. The maximum exposure is not representative of the actual loss we would incur.
Defaulted loans represent loans in our Fannie Mae at-risk portfolio or Freddie Mac SBL pre-securitized portfolio that are probable of foreclosure or that have foreclosed and for which the Company has recorded a collateral-based reserve (i.e., loans where we have assessed a probable loss). Other loans that are delinquent but not foreclosed or that are not probable of foreclosure are not included here. Additionally, loans that have foreclosed or are probable of foreclosure but are not expected to result in a loss to the Company are not included here.
Fannie Mae DUS risk-sharing obligations are based on a tiered formula and represent substantially all of our risk-sharing activities. The risk-sharing tiers and the amount of the risk-sharing obligations we absorb under full risk-sharing are provided below. Except as described in the following paragraph, the maximum amount of risk-sharing obligations we absorb at the time of default is generally 20% of the origination UPB of the loan.
Risk-Sharing Losses
Percentage Absorbed by Us
First 5% of UPB at the time of loss settlement
Next 20% of UPB at the time of loss settlement
Losses above 25% of UPB at the time of loss settlement
Maximum loss
20% of origination UPB
Fannie Mae can double or triple our risk-sharing obligation if the loan does not meet specific underwriting criteria or if a loan defaults within 12 months of its sale to Fannie Mae. We may request modified risk-sharing at the time of origination, which reduces our potential risk-sharing obligation from the levels described above. At times, we have, and may in the future, agree to a higher risk-sharing percentage (up to 100% of UPB) after origination and under limited circumstances.
We have a loss-sharing arrangement with Freddie Mac related to SBL loans that is only applicable to SBL loans that are pre-securitized and outstanding for more than 12 months. If a loan defaults prior to securitization, we are required to share the losses with Freddie Mac. Our loss-sharing arrangement is a 10% top loss, meaning that we are responsible for the first 10% of the losses incurred on such defaulted loans. We had three defaulted loans with allowances in our portfolio that were awaiting final resolution as of December 31, 2025. We received an insignificant loss settlement notice from Freddie Mac in the first quarter of 2026 and paid the loss settlement accordingly.
We use several techniques to manage our risk exposure under the Fannie Mae DUS risk-sharing program. These techniques include maintaining a strong underwriting and approval process, evaluating and modifying our underwriting criteria given the underlying multifamily housing market fundamentals, limiting our geographic market and borrower exposures, and electing the modified risk-sharing option under the Fannie Mae DUS program.
The “Business” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains a discussion of the risk-sharing caps we have with Fannie Mae.
We regularly monitor the credit quality of all loans for which we have a risk-sharing obligation. Loans with indicators of underperforming credit are placed on a watch list, assigned a numerical risk rating based on our assessment of the relative credit weakness, and subjected to additional evaluation or loss mitigation. Indicators of underperforming credit include poor financial performance, poor physical condition, poor management, and delinquency. A collateral-based reserve is recorded when it is probable that a risk-sharing loan will foreclose or has foreclosed and it is expected to result in a loss for the Company, and a reserve for estimated credit losses and a guaranty obligation are recorded for all other risk-sharing loans. We do not record a collateral-based reserve when it is probable that a risk sharing loan will foreclose or has foreclosed, and the disposition proceeds are expected to be higher than the UPB, resulting in no losses for the Company.
The allowance for risk-sharing obligations related to our $67.5 billion at-risk Fannie Mae servicing portfolio and our Freddie Mac SBL defaulted loans as of December 31, 2025 was $25.0 million compared to $24.2 million as of December 31, 2024.
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As of December 31, 2025, 14 loans (11 Fannie Mae loans and three Freddie Mac SBL loans) were in default with an aggregate UPB of $158.8 million compared to six loans (three Fannie Mae loans and three Freddie Mac SBL loans) with an aggregate UPB of $41.7 million that were in default as of December 31, 2024. The collateral-based reserve on defaulted loans was $12.6 million and $4.0 million as of December 31, 2025 and December 31, 2024, respectively. We had a provision for risk-sharing obligations of $9.4 million for the year ended December 31, 2025 and a benefit for risk-sharing obligations of $974 thousand for the year ended December 31, 2024.
For the ten-year period from January 1, 2016 through December 31, 2025, we recognized net write-offs of risk-sharing obligations of $9.2 million, or an average of less than one basis point annually of the average at risk Fannie Mae portfolio balance.
We are obligated to repurchase loans that are originated for the GSEs’ programs if certain representations and warranties that we provide in connection with the sale of the loans through these programs are breached. In lieu of repurchasing a loan directly from the GSEs, we have entered into Indemnification and Repurchase Agreements. These indemnification agreements delay the requirement to repurchase the loan for periods of up to two years, and in exchange we fund a collateral reserve generally equal to 20% of the unpaid principal balance of the loan and pay a financing fee to the GSE for the uncollateralized portion of the unpaid principal balance. When we agree to repurchase or indemnify the GSEs, we are required to report the loan or underlying collateral as an asset and the related obligation to repurchase the loans or indemnification liability to the GSE as a liability on our Consolidated Balance Sheets. NOTE 5 in the consolidated financial statements provides additional details related to our repurchase and indemnification activity over the past two years. NOTE 2 contains additional details related to our accounting policy for repurchased and indemnified loans.
Over the past two years, we have repurchased, indemnified or expect to indemnify the GSEs for $221.6 million of loans. The uncollateralized portion of the indemnification agreements was $60.7 million, and $46.9 million at December 31, 2025 and 2024, respectively. These loans in 2025 and 2024 are the only repurchase obligations in our history, and we have not yet realized any credit losses associated with these repurchase obligations.
New/Recent Accounting Pronouncements
NOTE 2 in the consolidated financial statements in Item 15 of Part IV in this 10-K contains a description of the accounting pronouncements that the Financial Accounting Standards Board has issued and that have the potential to impact us but have not yet been adopted by us. There were no other accounting pronouncements issued during 2025 that have the potential to impact our consolidated financial statements.
