MBA: Multifamily Lending Increased 6 Percent to a New $285B High in 2017

Strong market conditions helped fuel a 6 percent increase in multifamily lending in 2017 as lenders provided a record high $285 billion in new mortgages for apartment buildings with five or more units, the Mortgage Bankers Association reported today.

“The multifamily lending market in 2017 benefited from improving fundamentals, rising property values and low interest rates,” said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. “The result was larger loan sizes and record levels of overall borrowing and lending.”

Woodwell said the market remains well served, with 2,554 lenders last year making loans backed by multifamily rental properties. “Demand came from borrowers and lenders of all sizes, with loan amounts ranging from thousands of dollars to hundreds of millions,” he said.

The top five multifamily lenders in 2017 by dollar volume were Wells Fargo, CBRE Capital Markets, Inc., JP Morgan Chase & Company, Walker & Dunlop and Berkadia. Fifty-eight percent of the active lenders made five or fewer multifamily loans over the course of the year.

The $285 billion in multifamily mortgages originated in 2017 were funded by a variety of capital sources. By dollar volume, the greatest share (46 percent) went to the government sponsored enterprises, Fannie Mae and Freddie Mac.

MBA’s annual report on the multifamily lending market is the most comprehensive view available of the multifamily lending market, and includes:
–A detailed summary of the $285 billion multifamily market
–Profiles of distinct market segments, including the very-small loan lender segment (loans of $1 million or less)
–A breakout of 2017 multifamily lending volume by investor group
–A listing of the 2,554 lenders who made multifamily loans in 2017, including their lending volume, number of loans made and average loan size
–A listing of metropolitan areas and the volume of very small loans made in each in 2017.

MBA’s annual report is based on data from its 2017 Commercial Multifamily Annual Origination Volume Summation and the recently released Home Mortgage Disclosure Act (HMDA) data. The survey targeted dedicated commercial/multifamily originators and covered $530 billion in commercial/multifamily loans in 2017. The HMDA data added multifamily loans from banks, thrifts and other institutions that meet certain single-family origination thresholds. When combined, the two datasets provide the most complete assessment of the multifamily lending market available.

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