Multifamily Lending Robust in Q3

Originations hit a new quarterly high, according to MBA’s latest report.

Origination Volume Index; 2001 Quarterly Average = 100

Source: MBA

2021 is shaping up to be a very strong year for commercial real estate finance.

According to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations, borrowing hit an all-time quarterly high during the third quarter, driven by strong or improving market fundamentals, higher property values, low interest rates, and solid mortgage performance.

All property types showed a year-over-year increase in lending volumes, and multifamily was no exception, with a strong 105 percent increase that is putting the sector on track for a record year. On a quarterly basis, third-quarter originations for multifamily properties increased 31 percent.

Among capital sources, nearly every major group—including CMBS, banks, life companies and investor-driven lenders—is lending well above 2020 levels, with life companies and investor-driven lenders also exceeding their 2019 year-to-date volumes. The one exception is the GSEs (Fannie Mae and Freddie Mac), whose conservator limited their loan purchase volumes this year.

With the worst of the COVID-19 pandemic hopefully in the rearview mirror, MBA expects the economic rebound to continue this year and next, with the multifamily sector benefiting from low interest rates, strong rental demand, and broader economic growth.

Jamie Woodwell is the Mortgage Bankers Association’s vice president of commercial real estate research.

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