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I have two different SharePoint Online tenancies.

  1. Multi-factor authentication is enabled and it is using DUO authentication as well.
  2. No multi-factor authentication

I have SharePoint Designer 2013 installed in my machine and I am able to access my "Tenancy 2" sites without any issue, but not "Tenancy 1". Tenancy 1 sites are throwing below error (Note: I have entered the right user name and password)

Is there any special configuration required to be able to access the SharePoint Online site with MFA and DUO enabled?

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You need to use an "app" password, or maybe a registry hack. See the following for info:

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