For NHRP spoke routes, you can configure a local tunnel endpoint by assigning a DHCP or local IP address. If DHCP is used, the hub end of the NHRP tunnel must be able to reach the DHCP subnet from which the spoke is assigned a local DHCP address. The encapsulation type must be GRE multipoint.

The local physical interface option is supported only for spoke routers, not hub routers. NHRP hub routes must be configured using a local IP address.