90 Day Late Multifamily Loans Rise By Over 50% in Q2 2022

While total distressed multifamily loans appear to be shrinking, or at least snapped up faster than they can accumulate, banks are reporting they had over 50% more 90+ day late multifamily mortgage loans at the end of Q2 2022.

Dive into the BankProspector dashboard to find out which banks hold most of these non-performing notes.

Multifamily Loans

U.S. Multifamily Loans and REO Chart Historical [Q2 2022]
U.S. Multifamily – Two Year Historical

The incredible demand for multifamily assets over the past couple of years appears to have kept this space solid.

The total pool of distressed multifamily loans has steadily declined since peaking in Q3 2021. It is now back around levels seen in the second quarter of 2020.

277 banks report that they currently hold just over $822M in non-accrual stage multifamily loans.

Following that is around $662M in newly defaulting 30 to 89 day late loans and $167M in 90 day plus late loans, which are still making their way through the process.

U.S. Multifamily Loans and REO Chart [Q2 2022]
U.S. Multifamily – Q2 2022

Multifamily REO

The volume of multifamily REOs on bank books continues to shrink, now down to around just over $33M. That’s close to half the volume seen in Q2 of 2021.

With investors and funds continuing to favor loading up on MF income properties to recession-proof their portfolios and boost income, any new defaults seem to be rapidly absorbed.

Looking Ahead

Multifamily properties and debt still seem to be one of the most in-demand asset classes. There are few REOs available, though a growing pool of non-performing, 90+ day loans may come available for investors.

Veteran investors report that they are being increasingly selective about the assets they buy and prices that they will pay for them, even more so with rumors of a new recession in the works.

Rapid, back-to-back interest rate hikes could make it tougher to balance the numbers for investors, while any pullback in capital markets could mean more owners end up defaulting on their loans at maturity.

Log in now to see which banks are holding the most distressed multifamily loan notes.

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