Downward Trend Continues for Commercial and Multifamily Mortgage Delinquencies


Delinquency rates of mortgages backed by commercial and multifamily properties have broadly improved in recent months, according to two reports released by the Mortgage Bankers Association (MBA).

The summary of findings come from MBA’s Commercial Real Estate Finance (CREF) Loan Performance Survey for August, and the latest quarterly Commercial/Multifamily Delinquency Report for the second quarter of 2021. The CREF Loan Performance Survey was developed by MBA to better understand the ways pandemic is impacting commercial mortgage loan performance. MBA’s regular quarterly analysis of commercial/multifamily delinquency rates is based on third-party numbers covering each of the major capital sources. 

“Delinquency rates for mortgages backed by commercial and multifamily properties have broadly improved in recent months as the U.S. economy continues to heal from the COVID-19 pandemic,” says Jamie Woodwell, MBA’s vice president of commercial real estate research. “Performance is still property-type dependent, with the properties that saw the most immediate and dramatic impacts from the pandemic – lodging and retail – still experiencing considerably more stress than others but showing improvement. Delinquency rates are down significantly for those property types and remain muted for others.” 

“There should be continued downward pressure on delinquency rates as more later-stage delinquencies are worked through,” adds Woodwell. “What happens with early-stage delinquencies will largely be a function of the broader economy.”

The balance of commercial and multifamily mortgages that are not current declined in August. Outstanding loan balances were current for 96.6%, up from 95.5% a month earlier. The percentage for those 90+ days delinquent or in REO was 2.2%, down from 2.9 % a month earlier, whole 0.2% were 60-90 days delinquent and 0.3% were 30-60 days delinquent (unchanged from a month earlier).

Those less than 30 days delinquent was down from 1.1% a month earlier to 0.8%. Loans backed by lodging and retail properties continue to see the greatest stress, but have improved in recent months.

Commercial and multifamily mortgage delinquencies declined in the second quarter of 2021. 

Fannie Mae delinquencies (60 or more days delinquent) were at 0.53%, a decrease of 0.13 percentage points from the first quarter while Freddie Mac (60 or more days delinquent) was 0.15%, a decrease of 0.02 percentage points from the first quarter. CMBS (30 or more days delinquent or in REO) was at 5.68%, a decrease of 0.58 percentage points from the first quarter.

Read the full report CREF Loan Performance Survey for August 2021 here and the Commercial/Multifamily Delinquency Report here.

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