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Delinquency Rates Steady on Commercial and Multifamily Mortgages

Phil Hall
Sep 04, 2018
Fannie Mae plans to increase the loan limit of its small mortgage loans for the multifamily market from $3 million to $6 million nationwide and to $5 million in high-cost markets

The second quarter saw minimal activity in commercial and multifamily mortgage delinquency rates, according to new data from the Mortgage Bankers Association (MBA).
 
Based on the unpaid principal balance of loans, the MBA determined that delinquency rates for banks and thrifts was 0.50 percent in the first quarter, a decrease of 0.01 from the first quarter of 2018. Life company portfolios carried a 0.03 percent rate, an increase of 0.01 percentage points from one year earlier. Fannie Mae and Freddie Mac had a 0.10 percent and 0.01 percent rate, down 0.03 percent and 0.01 percent, respective, from one year earlier. And loans in commercial mortgage-backed securities had a 3.52 delinquency rate, down 0.41 percent from the previous year.
 
“It is hard to overstate how low commercial and multifamily mortgage delinquency rates are today,” said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. “Only three-one-hundredths of one percent (0.03 percent) of the balance of commercial and multifamily mortgages held by life insurance companies is delinquent, as is one-one-hundredth of one percent (0.01 percent) of the balance of multifamily mortgages held by Freddie Mac. The delinquency rate for loans held on banks’ balance sheets is the lowest in the series history.  Strong property fundamentals and values, coupled with low interest rates and ample financing options, all continue to support commercial real estate owners and their abilities to repay their mortgages.”

 
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