A Varied Market

By Reginald Booker

Source: Mortgage Bankers Association

Source: Mortgage Bankers Association

With almost 3,000 different lenders and many tens of thousands of loans made each year, there is currently more than $940 billion in mortgage debt outstanding. But there is remarkable diversity in lending for multi-family rental properties. Loans vary considerably, as do the types of lenders. Nowhere is this clearer than in looking at the average size of loans made by different lender types.

Multi-family loans made by and for life insurance company portfolios had the largest average loan size in 2013, according to recently released data, at $22 million. The government-sponsored enterprises’ (Fannie Mae and Freddie Mac) multi-family loans had an average size of $12.5 million, FHA loans averaged $9 million, and CMBS loans averaged $7.3 million. The average size of a multi-family loan made for a bank, thrift or credit union portfolio was $1.9 million. There is considerable variety within lender groups, as well, with some life insurance companies focusing on small-balance loans and some banks making extremely large-balance loans.

The data comes from the MBA Commercial Multifamily Annual Origination Volume Summation and the Home Mortgage Disclosure Act (HMDA). The MBA survey targets the dedicated commercial/multi-family originator, while the HMDA data adds multi-family loans from banks, thrifts and other institutions that meet certain single-family origination thresholds. When combined, the two data sets provide the most comprehensive assessment of the multi-family lending market available.

—Reginald Booker is senior survey specialist for the Mortgage Bankers Association of America.