Commercial, Multifamily Delinquencies Fell In Q3

Delinquencies on commercial and multifamily mortgages fell in Q3 2021, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.

Loans delinquent by more than 90 days or in non-accrual fell by 0.06 points in Q2 to 0.69% for banks and thrifts. Life company portfolios saw a decrease of 0.01 to 0.04% for loans 60 or more days late.

Fannie Mae and Freddie Mac delinquencies of 60 or more days fell to 0.42% and 0.12%, respectively. For CMBS, the delinquency rate for 30 or more days or in REO fell 0.82 percentage points to 4.86%.

“Commercial mortgage delinquency rates for every major capital source have come down since the early months of the pandemic,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research. 

“With low numbers of loans becoming newly delinquent, much of the declines are coming from the resolution of loans with later-stage delinquency statuses. Despite successive waves of COVID-19, the economy has shown solid growth, and it is hard to imagine a return to the extraordinary shutdowns in early 2020 that negatively impacted some sectors of commercial real estate.”

Industrial and multifamily properties are particularly hot right now due to demographic and business changes brought on by the pandemic. NewPoint Real Estate Capital, the apartment building lender led by former Freddie Mac CEO David Brickman, recently acquired Housing & Healthcare Finance LLC, a commercial real estate finance company. 

“Multifamily housing continues to benefit from significant changes in terms of the increased demand for rental housing, coupled with a lack of supply, and demographic trends, such as the growing population of people over 80 years of age and their need for senior housing,” Brickman told Bloomberg.

“Multifamily is a hotspot, broadly, in commercial real estate.”