Walker & Dunlop, Inc. (WD)

Item 2.   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 Quarterly Report on Form 10-Q (“Form 10-Q”). 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” in our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”).

Forward-Looking Statements

Some of the statements in this Form 10-Q of Walker & Dunlop, Inc. and subsidiaries (the “Company,” “Walker & Dunlop,” “we,” “us,” or “our”) may constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, projections, plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans, or intentions.

The forward-looking statements contained in this Form 10-Q reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions, and changes in circumstances that may cause actual results to differ significantly from those expressed or contemplated in any forward-looking statement. Statements regarding the following subjects, among others, may be forward-looking:

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While forward-looking statements reflect our good-faith projections, assumptions, and expectations, they do not guarantee future results. Furthermore, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying

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assumptions or factors, new information, data or methods, future events or other changes, except as required by applicable law. For a further discussion of these and other factors that could cause future results to differ materially from those expressed or contemplated in any forward-looking statements, see Part I, Item 1A. Risk Factors in our 2025 Form 10-K.

Business

Overview

Walker & Dunlop operates one of the largest commercial real estate capital markets and finance platforms in the United States, with a growing international capital markets business. We are focused on originating, selling, and servicing loans, with a market-leading position in the U.S. multifamily sector. Our longstanding multifamily focus has established us as one of the largest multifamily property sales brokerage platforms in the U.S., and perennially as one of the largest lenders for Fannie Mae and Freddie Mac (collectively, the “GSEs”), and the Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development (together with Ginnie Mae, “HUD”) (collectively, the “Agencies”). We also provide investment management and other ancillary services to commercial real estate owners and investors.

Our business is driven by two primary sources of revenues:

A core element of our strategy is to convert transaction activity into contractual, long-duration, recurring revenue streams. When we originate loans—particularly through Agency programs—we typically retain the right to service those loans, which increases the size of our commercial real estate loan servicing portfolio, and generates ongoing cash flows over the life of the loan. Our strategy has established Walker & Dunlop as the sixth largest commercial real estate loan servicer in the U.S. As of June 30, 2026, we serviced $145.8 billion of commercial real estate loans (primarily multifamily) that provide durable, largely prepayment protected cash flows. This servicing platform is a foundational component of our business that supports our ability to invest in growth initiatives.

Business Mix and Growth Strategy

Our business is currently driven primarily by our multifamily-focused lending, brokerage, property sales and servicing activities in the United States. These operations benefit from our long-standing relationships with the Agencies and other institutional capital providers, as well as our scale within the multifamily sector.

Over the past several years, we have been investing in expanding and diversifying our service offerings to commercial real estate owners and investors, including appraisal, valuation, research, investment banking, and additional investment management services. We have also been expanding our lending, brokerage and property sales capabilities across other commercial real estate asset classes, including hospitality, industrial, and digital infrastructure and expanding our presence and service offerings in Europe to better serve many of our institutional clients that operate global investment strategies. These initiatives represent long-term growth opportunities. Many of these businesses are currently operating at or near break-even as we continue to invest in their development. As a result, our near-term financial performance continues to be driven predominantly by our core multifamily lending, brokerage, property sales services, loan servicing, and investment management platforms.

We are also investing in proprietary technology and software solutions to improve the efficiency of our business model, enhance our competitive position and support the long-term evolution of our business. These investments are designed to increase our touchpoints with current and prospective clients, improve the delivery and scalability of our existing and future services, and drive operating efficiencies across our business. As advancements in artificial intelligence and related technologies continue to reshape financial and real estate services, we believe it is critical to invest proactively to ensure we remain an essential partner to our clients and well-positioned within the evolving

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transaction ecosystem. Our technology initiatives are intended to strengthen client engagement, improve data-driven decision-making, and enhance our ability to originate transactions and continue growing our servicing and asset management platforms over time.

Segment Overview

We manage our business through three reportable segments:

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These reportable segments are determined based on the product or service provided and reflect the manner in which management evaluates the Company’s financial performance. The segments and related services are further described in the following paragraphs.

Capital Markets (“CM”)

CM provides a comprehensive range of commercial real estate finance products to our customers, including Agency lending, debt brokerage, property sales, appraisal and valuation services, and real estate-related investment banking and advisory services, including housing market research. Our long-established relationships with the Agencies and institutional investors enable us to offer a broad range of loan products and services to our customers. We provide property sales services to owners and developers of multifamily and

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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 innovative solutions and a better experience for our customers and (ii) allow us to reach a broader customer base.

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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 3rd 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 5th 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 6th 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 1st and 7th 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 4th 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 disclose

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