Commercial and Multifamily Mortgage Delinquencies Declined in September

CONTACT
Adam DeSanctis
adesanctis@mba.org
(202) 557-2727

WASHINGTON, D.C. (October 6, 2021) - Delinquency rates for mortgages backed by commercial and multifamily properties declined in September, according to the Mortgage Bankers Association's (MBA) latest monthly CREF Loan Performance Survey. The survey was developed to better understand the ways the COVID-19 pandemic is impacting commercial mortgage loan performance.

"Commercial and multifamily mortgage performance has improved considerably since the worst of the downturn," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Research. "The stress that entered - and remains - in the market is largely concentrated in lodging and retail properties, but with fewer new loans becoming delinquent, and shrinking balances of overall delinquency as lenders and servicers work out the longer-term troubled loans."

Key Findings from MBA's CREF Loan Performance Survey for September 2021:  

The balance of commercial and multifamily mortgages that are not current slightly decreased in September.

  • 96.7% of outstanding loan balances were current, up from 96.6% in August 2021.
  • 2.2% were 90+ days delinquent or in REO, unchanged from a month earlier.
  • 0.2% were 60-90 days delinquent, unchanged from a month earlier.
  • 0.3% were 30-60 days delinquent, unchanged from a month earlier.
  • 0.8% were less than 30 days delinquent, unchanged from a month earlier.  

Loans backed by lodging and retail properties continue to see the greatest stress.

  • 14.0% of the balance of lodging loans were delinquent, up from 13.4% a month earlier.
  • 8.2% of the balance of retail loan balances were delinquent, down from 8.5% a month earlier.
  • Non-current rates for other property types were mixed during the month.
  • 1.8% of the balances of industrial property loans were non-current, up from 1.5% a month earlier.
  • 1.8% of the balances of office property loans were non-current, down from 2.0% a month earlier.
  • 1.3% of multifamily balances were non-current, up from 1.2% a month earlier.  

Because of the concentration of hotel and retail loans, CMBS loan delinquency rates are higher than other capital sources.

  • 7.2% of CMBS loan balances were non-current, up from 6.9% a month earlier.
  • Non-current rates for other capital sources were more moderate.
    • 2.0% of FHA multifamily and health care loan balances were non-current, unchanged from a month earlier.
    • 1.2% of life company loan balances were non-current, down from 1.9% a month earlier.
    • 0.6% of GSE loan balances were non-current, unchanged from a month earlier.

MBA's CREF Loan Performance survey collected information on commercial and multifamily mortgage portfolios as of September 20, 2021. This month's results build on similar monthly surveys conducted since April 2020. Participants reported on $2.0 trillion of loans in September, representing approximately 50% of the total $4 trillion in commercial and multifamily mortgage debt outstanding (MDO).

For more information on MBA's CREF Loan Performance Survey, please visit: https://www.mba.org/store/products/research/general/report/commercial-real-estate-finance-loan-performance-survey.