Multifamily Bank Lending Slows As Delinquencies Climb

Multifamily Bank Lending Slows As Delinquencies Climb

Largest Delinquency Increase Involves Loans 90 or More Days Late

By Mark Heschmeyer and Rohit Diwadkar
CoStar News

March 11, 2021 | 10:23 AM

The amount of multifamily bank loan delinquencies and nonaccruals rose 30% in the fourth quarter of last year, according to year-end numbers released by the Federal Deposit Insurance Corp.

The spike came as COVID-19 cases were also peaking. Yet as some borrowers struggled, banks continued to add to the total of multifamily loans on their books. The year-end total of $481 billion was a 4.7% year-over-year increase.

The fourth-quarter total delinquent and nonaccrual loans of $2.44 billion was just shy of the $2.43 billion total at the end of the first quarter of 2020 when the coronavirus was first declared a pandemic and the national economy shut down. Loans placed into nonaccrual status indicate the bank is doubtful the loan will be collected in full.

By amount of time delinquent, the largest year-over-year percentage increase came in bank multifamily loans delinquent 90 or more days, which increased 465% to $277.1 million. By dollar total, loans 30 to 90 days delinquent made up the largest amount at $1.17 billion at year-end. That was up 86% year over year. The total of multifamily loans assigned a nonaccrual status ended the year at $993.7 million. All the totals are the highest since the Great Recession.

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