Commercial & Multifamily Mortgage Delinquencies Decreased in Jan.

Washington, DC, February 3, 2021-Delinquency rates for mortgages backed by commercial and multifamily properties decreased in January, according to the Mortgage Bankers Association's (MBA) latest monthly MBA CREF Loan Performance Survey. The survey was developed to better understand the ways the COVID-19 pandemic is impacting commercial mortgage loan performance.

"The stress in commercial mortgages continues to be concentrated among the property types that have been most directly and immediately impacted by the pandemic, most notably lodging and retail properties," said Jamie Woodwell, MBA's vice president of commercial real estate research. "Among some other property types, including office and multifamily, overall delinquency rates remain lower, but have climbed slightly in recent months. While MBA is forecasting for a strong economic rebound in the second half of this year, as a rapid roll-out of vaccines and continued government fiscal assistance to households and businesses provide support for the market, there still remains a heightened sense of uncertainty about the months ahead."

The balance of commercial and multifamily mortgages that are not current decreased in January, driven by fewer loans becoming newly delinquent.

  • 94.3% of outstanding loan balances were current, up from 94.0% in December.

Loans backed by lodging and retail properties continue to see the greatest stress, but there were slight improvements in January. The overall share of retail, industrial and lodging loan balances that are delinquent decreased.

  • 21.5% of the balance of lodging loans were not current in January, down from 22.5% a month earlier.
  • 11.8% of the balance of retail loan balances were delinquent, down from 11.9% a month earlier.
  • Non-current rates for other property types were lower and mixed during the month.
    • 4.0% of the balances of industrial property loans were non-current, down from 4.2% a month earlier.
    • 3.0% of the balances of office property loans were non-current, up from 2.7%.
    • 1.8% of multifamily balances were non-current, up from 1.7% a month earlier