Delinquency Rate for Multifamily Still Below 1 Percent

By Keat Foong, Executive Editor Washington, D.C.—Delinquency rates for multifamily and commercial real estate in the third quarter remain historically low, less than 1 percent, although they have ticked up, according to the Mortgage Bankers Association (MBA). The third quarter Commercial/Multifamily Delinquency Report from MBA shows that between the second and third quarters, the 30-plus-day delinquency rate on loans held in commercial mortgage-backed securities (CMBS) rose 0.10 percentage points to 0.63 percent.  The 60-plus-day delinquency rate on multifamily loans held or insured by Fannie Mae rose 0.05 percentage points to 0.16 percent. The 60-plus-day delinquency rate on multifamily loans held or insured by Freddie Mac fell 0.02 percentage points to 0.01 percent.  “Commercial/multifamily mortgages have not seen the same kind of deterioration in performance witnessed among other real estate loans, and at the end of the third quarter, delinquency rates for every investor group remained at the lower end of their historical ranges,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “That being said, delinquency rates for nearly every investor group did see increases during the third quarter, and economic and credit market stress is likely to continue that trend.” The 60-plus-day delinquency rate on loans held in life company portfolios rose 0.03 percentage points to 0.06 percent.  The 90-plus-day delinquency rate on loans held by FDIC-insured banks and thrifts rose 0.20 percentage points to 1.38 percent.To put these numbers in context, MBA said, of 35,135 commercial/multifamily loans in life company portfolios, only 36 loans with an aggregate unpaid principal balance of less than $144 million were 60-plus days delinquent at the end of the quarter.