Community banks' multifamily have shown a “dramatic rise in delinquent loans and realized losses,” including a 12-year delinquency high of $6.1 billion, according to a CRED iQ analysis.
The record delinquent loans translate to a 0.97% delinquency rate based on a multifamily total loan amount of $629.7 billion. The delinquency definition includes any loan with a payment of at least 30 days late. The last time community banks saw the category top $6 billion was in March 2012 when the rate was 4.9%. A more disturbing comparison would have been 2010 Q3, when the figure hit $12.34 billion.
The increase in multifamily distress is more noticeable in the context of more than $2 trillion in CRE loans. As of January 2025, the CMBS multifamily distress rate reached 12.9%, 40 basis points up from December 2024. A year ago, the rate was 2.6%. For CMBS, distress includes loans at least 30 days late and special servicing.
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