As of September 2026, Fannie Mae and Freddie Mac both cap a named storm deductible at 7.5% of the property's total insurable value (TIV). Fannie Mae sets it in Sec. 501.02B and 502.02 of the Multifamily Selling and Servicing Guide. Freddie Mac sets it in Sec. 31.7(d) of the Multifamily Seller/Servicer Guide.
A typical 5% Gulf Coast named storm deductible sits inside that cap. So the percentage is rarely the problem. The problems are the named storm limit, the dollar minimum hiding inside the percentage, and an assumption that wind can be bought down with an expanded deductible.
This is a general guide, not your loan document. Your loan agreement controls, and a lender can be stricter than the agency.
Agency named storm rules
- 7.5%
- cap on a named storm deductible, as a share of total insurable value, at both agencies
- 90%
- minimum named storm limit, as a share of TIV or of the largest property on a blanket policy
- $100K
- most a stated minimum inside a percentage deductible can be on a specific limit ($250K blanket)
- 72
- hours before rate lock that Fannie Mae needs an insurance exception request through DUS Gateway
What do the two agencies actually require?
Fannie Mae figures are from the guide effective September 28, 2026. Freddie Mac figures are from Chapter 31 as updated by the August 25, 2026 bulletin.
Named storm deductible
Fannie Mae: Up to 7.5% of the collateral's total insurable value (TIV). Sec. 501.02B and 502.02.
Freddie Mac: Up to 7.5% of TIV. Sec. 31.7(d).
Stated minimum inside a % deductible
Fannie Mae: Not more than $100,000 (specific limit) or $250,000 (shared blanket limit). Sec. 501.02B.
Freddie Mac: Not more than $100,000 (specific) or $250,000 (blanket). Sec. 31.7(d).
Deductible stated only in dollars
Fannie Mae: $50,000 under $10M insurable value; $100,000 at $10M or more. Sec. 501.02B.
Freddie Mac: $50,000 under $10M; $100,000 at $10M or more. Sec. 31.7(d).
Wind/hail (not named storm)
Fannie Mae: 5% of TIV, same dollar caps and minimums. Sec. 501.02B.
Freddie Mac: 5% of TIV, stated minimum $100,000 or less (blanket $250,000). Sec. 31.7(b).
Business income waiting period
Fannie Mae: For named storm: 15 days, or $100,000 if stated in dollars. Sec. 502.02.
Freddie Mac: 15 days or $100,000, for both wind/hail and named storm. Sec. 31.7(b) and (d).
Named storm coverage amount
Fannie Mae: At least 90% of TIV (standalone) or of the largest individual property (blanket). Valuation may not rely solely on PML. Sec. 502.02.
Freddie Mac: Blanket named storm limit not less than 90% of the largest individual TIV, per occurrence, reinstating. Sec. 31.7(c).
Sources: Fannie Mae Multifamily Selling and Servicing Guide, Part II, Section 501 and Section 502, effective September 28, 2026; Freddie Mac Multifamily Seller/Servicer Guide, Chapter 31, Guide Bulletin update August 25, 2026. Both guides change often, so confirm against the current version and your loan documents.
Freddie Mac applies its Sec. 31.7(c) named storm rules to properties in Tier 1 Windstorm Risk counties, as defined by the insurer. Fannie Mae uses a similar Tier I named storm county test in Sec. 502.02.
For the rest of the agency insurance rules, see our lender insurance requirements guide. For how coastal wind programs are placed in the first place, see catastrophe and coastal property insurance.
If 5% is fine, what fails a lender review?
Four things, roughly in the order they trip owners up.
The named storm limit is set by PML, not TIV. The percentage deductible is rarely what fails a review. The limit is. Fannie Mae requires named storm coverage of at least 90% of TIV, and the valuation may not rely solely on a probable maximum loss (PML) model. Freddie Mac wants a blanket named storm limit of at least 90% of the largest individual TIV.
The dollar minimum inside the percentage is too high. A policy can read "5% of TIV, $500,000 minimum" and still fail. The stated minimum cannot exceed $100,000 on a specific limit or $250,000 on a blanket limit. On a small building the minimum, not the percentage, becomes your deductible.
You assumed an expanded deductible would cover wind. Both agencies allow expanded deductibles in some cases. Freddie Mac's Sec. 31.5(b) says no for windstorm, earthquake, and NFIP. Fannie Mae's expanded deductible language does not clearly address named storm, so confirm with your lender before you count on it.
The all-other-perils deductible is over the dollar cap. Fire, water, theft, and liability-driven losses fall under the all-other-perils deductible: $50,000 under $10M of insurable value, $100,000 at $10M or more, $250,000 on a blanket limit. A $250,000 AOP deductible on a single $15M building is out of compliance no matter how the wind terms look.
Does a 5% deductible pass on a $20M Baldwin County property?
One multifamily property, $20M TIV, Baldwin County, Alabama. Round numbers, illustrative only.
Named storm deductible at 5%. $1,000,000. Compliant. It is under the cap.
The 7.5% cap. $1,500,000. The most either agency lets the deductible reach.
So a coastal owner with a 5% deductible has $500,000 of room under the cap. That room means the deductible alone will not be what your lender flags.
Now change one thing: the policy states "5% of TIV, $250,000 minimum" on a specific limit. The percentage still works out to $1M. But the stated minimum is over the $100,000 specific-limit ceiling, so a reviewer can flag the wording even though the dollars you would pay do not change. Ask your carrier to reword it before the lender does.
How does a PML-based named storm limit fail the 90% test?
A blanket program across four Baldwin County properties: $60M total, and the largest single property is $20M. A limit set by a PML model comes in at $12,000,000. It is cheaper to buy, because the model says a single storm will not destroy every building.
Run the math
90% × $20M =
$18M
It fails, even though the deductible is fine. The fix is a higher blanket named storm limit, and that costs premium. Check the limit at renewal, not only the deductible.
Can an expanded deductible or a buy-down fix a compliance gap?
Not by default. Freddie Mac allows a Servicer to approve expanded deductibles on existing mortgages, up to $100,000 or $150,000, but Sec. 31.5(b) says not for NFIP, windstorm, or earthquake. It is approved for one policy term at a time.
Fannie Mae allows expanded deductibles on policies other than NFIP, up to $100,000 or $150,000, with conditions: liquid assets of at least four times the deductible, a Pass rating, no delinquency in 12 months, property condition of 2 or better, and an annual lender review. Whether that reaches named storm is unclear from the table, so confirm with your lender.
Fannie Mae also takes insurance exceptions through DUS Gateway, at least 72 hours before rate lock. Fannie Mae will allow an aggregate deductible above the maximum if it is fully funded in a segregated account, T&I escrow, or by a third party.
The guides we reviewed say nothing about buy-downs. If you carry one, our wind deductible buy-down guide covers how it works. Get your lender's position in writing.
FAQ
Common questions about agency named storm rules
What is the maximum named storm deductible for Fannie Mae?
As of September 2026, 7.5% of the collateral's total insurable value under Sec. 501.02B of the Multifamily Selling and Servicing Guide. Sec. 502.02 says the deductible must not exceed the greater of 7.5% of TIV or the applicable Sec. 501.02B maximum. If the deductible is stated only as a dollar amount, the cap is $50,000 under $10M of insurable value and $100,000 at $10M or more.
What is Freddie Mac's windstorm deductible limit?
Sec. 31.7(d) of the Multifamily Seller/Servicer Guide allows a named storm deductible of 7.5% of TIV with a stated minimum of $100,000 or less, or $250,000 or less on a blanket limit. Sec. 31.7(b) allows a wind/hail deductible of 5% of TIV on the same minimums.
Is a 5% named storm deductible acceptable to Fannie Mae and Freddie Mac?
Yes, on the percentage. 5% is inside the 7.5% cap for both agencies. Check the stated dollar minimum, the named storm limit, and the other-perils deductible, because those are where programs fail.
Does Fannie Mae allow a PML-based named storm limit?
Not on its own. Sec. 502.02 requires named storm coverage of at least 90% of TIV, or of the largest individual property on a blanket policy, and says the valuation may not rely solely on PML.
Can I get an expanded deductible for wind?
Not from Freddie Mac. Sec. 31.5(b) excludes NFIP, windstorm, and earthquake from expanded deductibles. Fannie Mae's table is unclear on named storm, so confirm in writing with your lender. Both agencies also condition expanded deductibles on things like liquidity, so do not assume approval.
What if named storm coverage is unavailable?
Fannie Mae says it will consider a State insurance plan or a State-managed windstorm or beach-erosion pool. Freddie Mac also addresses state windpools in Sec. 31.7(e). Ask your lender how they treat it before you rely on one.
Does a wind deductible buy-down count toward the cap?
The agency guides we reviewed do not mention buy-downs or parametric coverage. Ask your lender in writing before you count on one.
Check your program against the loan before renewal
Send us your policy and your loan insurance section. We compare the deductible wording, the named storm limit, and the other-perils deductible against what the agency and your lender require, and tell you what to fix before the servicer finds it.
If the servicer has already flagged a gap, read our guide on force-placed insurance and act before the deadline.
Send us your program for a lender-compliance checkThis article is for general educational purposes only. It isn't legal, tax, accounting, or lending advice and doesn't create a producer-client relationship. Policy terms, exclusions, and availability vary by carrier, state, and property. Only the policy actually issued determines coverage. Regulatory and lender requirements change; confirm current rules with your attorney, lender, or servicer before relying on anything here.