Fifth Third Set to Expand Multifamily Lending With Fannie Mae DUS Deal

Group 1 - Fifth Third Bancorp (FITB) has entered into a definitive agreement to acquire Mechanics Bancorp's subsidiary, Mechanics Bank's Fannie Mae Delegated Underwriting and Servicing (DUS) business line, which includes a servicing portfolio with an unpaid principal balance of approximately $1.8 billion [1][8] - The DUS platform allows approved lenders to independently underwrite, close, and service multifamily loans while accessing a range of Fannie Mae-backed products [2] - The transaction is expected to close in the first quarter of 2026, subject to customary conditions and required third-party approvals, including Fannie Mae's approval of FITB as an authorized DUS lender [3] Group 2 - The acquisition is aimed at enhancing FITB's leadership in commercial real estate finance by expanding its multifamily lending capabilities, the largest segment of its commercial real estate portfolio [4] - Upon closing, FITB will gain direct access to Fannie Mae's multifamily lending platform and a well-established servicing operation, strengthening its ability to provide competitive financing solutions in the multifamily housing market [5] Group 3 - Over the past six months, shares of FITB have gained 15.4%, compared to the industry's growth of 19.4% [6]