Multifamily lending declined 1% between 2021-22: MBA

More than 2,200 different multifamily lenders provided $480.1 billion in new mortgages for apartment buildings with five or more units in 2022, a reduction of around 1% when compared to 2021 levels. This is according to an annual report of the multifamily lending market compiled and released by the Mortgage Bankers Association (MBA).

One-third of active multifamily lenders made five or fewer loans over the course of 2022, according to MBA. The association characterized the market as generally healthy, despite challenges that faced lending industries broadly last year.

“Multifamily borrowing remained strong in 2022, largely as a result of lending by banks,” said Jamie Woodwell, MBA’s head of commercial real estate research. “Beginning in last year’s third quarter, rising and volatile interest rates, uncertainty about property values, and questions about some property fundamentals led to a fall-off in borrowing and lending across commercial property types, including multifamily.”

While capital sources of lending fell, the amount by which it fell was almost offset by activity seen from banks, Woodwell explained.

“Most capital sources saw a significant decline in lending activity in 2022, but bank activity increased by an almost equal amount,” he said. “It’s unlikely that this momentum is occurring this year, given current evidence that banks have tightened underwriting standards and borrower demand has weakened.”

In terms of dollar volume, the greatest amount (42%) of the $480.1 billion in new mortgages for apartment buildings with five or more units went to depositories, MBA said.

“The top five multifamily lenders in 2022 by dollar volume were JPMorgan Chase, Wells Fargo, Walker & Dunlop, Berkadia, and Capital One Financial Corp,” MBA said.

Data from the report is sourced from both MBA and data released by the U.S. government under the Home Mortgage Disclosure Act (HMDA).