Walker & Dunlop, Inc.

What they do

The company originates multifamily loans through Fannie Mae, Freddie Mac, Ginnie Mae and HUD programs, generally funding them through warehouse facilities and selling them to investors within about 60 days while retaining servicing rights. It also brokers loans for life insurance companies, banks and other institutional investors without funding them, and provides multifamily property sales brokerage and appraisal services. Its investment management business makes debt and equity investments in commercial real estate and affordable housing.

Revenue drivers

• Agency loan originations and servicing — Revenue is recognized when the company simultaneously commits to originate a loan and sell it, reflecting origination fees, sale premiums and the fair value of expected servicing cash flows. The servicing portfolio was $145.8 billion as of June 30, 2026, with $69.5 billion at-risk Fannie Mae servicing.
• Capital Markets segment — Includes debt financing and property sales brokerage. Segment total revenues were $169 million in Q2 2026 versus $173 million in Q2 2025.
• Brokered lending — The company acts as a loan broker for institutional lenders that fund the loan directly, earning origination fees and lower ongoing servicing fees than on Agency loans. Q2 2026 brokered lending volume grew 17% year over year.
• HUD originations — The company is a HUD MAP and LEAN lender and a Ginnie Mae issuer; Q2 2026 HUD originations grew 43% year over year, and it ranked as the 5th largest overall HUD lender for HUD's fiscal year ended September 30, 2025.

Recent performance

Q2 2026 total transaction volume was $14.4 billion, up 3% from Q2 2025, with debt financing volume up 8%. Total revenues were $306.7 million, down 4%, and net income was $3.0 million with diluted EPS of $0.09, both down 91% from Q2 2025. Adjusted core EPS was $1.19, up 3%. Results included $23.2 million of operating and credit-related expenses tied to legacy indemnified and repurchased loans. Year-to-date debt financing volume rose 44% to $24.3 billion, and year-to-date GSE market share was 14.7% versus 11.2% in 2025.

Strategy

Management says it is nearing the conclusion of reviews of legacy repurchases and has strengthened underwriting and GSE partnerships. It is executing a disposition strategy for the repurchased loan portfolio, reducing that exposure by $39.4 million since quarter end to $153.8 million, with $41.7 million of credit-related reserves against the remaining portfolio. The company is promoting a five-year plan called Journey to '30 to expand services and client relationships. It also points to GSE lending capacity for the remainder of 2026 after gaining 3.5% of GSE market share in the first half of 2026.

Risks

• Agency relationship dependence — The company originates all loans held for sale through the Agencies' programs, and its approved-lender status may be terminated at any time, which would impair its ability to originate.
• Loan repurchase and risk-sharing exposure — As of June 30, 2026, the company had repurchased or agreed to indemnify and repurchase $193.3 million of GSE loans with $54.3 million of collateral-based reserves, and 16 loans with $198.6 million of UPB were in default.
• Credit costs from legacy loans — Q2 2026 results included $23.2 million of operating and credit-related expenses for legacy indemnified and repurchased loans, largely tied to a small number of fraudulent sponsors.
• Interest rate and government policy exposure — Placement fee revenue from escrow deposits tracks the effective Federal Funds Rate, which was 363 basis points at June 30, 2026 versus 433 basis points a year earlier, and federal budgetary actions can constrain HUD lending.

Outlook

Management said the GSEs have substantial lending capacity for the remainder of 2026 and sees opportunity after expanding GSE market share to 15% in the first half of 2026. It expects the legacy repurchase reviews to conclude and says they have strengthened underwriting and Agency partnerships. The company's stated focus is the Journey to '30 five-year plan to expand services and client relationships.