MBA: 2019 Multifamily Lending Up 7% to Record High
Fueled by strong market fundamentals and low interest rates, 2,589 different multifamily lenders provided $364.4 billion in new mortgages in 2019 for apartment buildings with five or more units, according to the Mortgage Bankers Association’s annual multifamily lending market report.
Last year’s $364.4 billion in multifamily lending volume is a 7 percent increase from the previous record high in 2018 of $339.2 billion. Forty-four percent of active lenders made five or fewer multifamily loans over the course of last year.
“Multifamily borrowing and lending hit a new record in 2019, driven higher by strong fundamentals, rising property values and low interest rates,” said MBA Vice President of Commercial Real Estate Research Jamie Woodwell. “By loan count, multifamily lending came from a wide range of firms, with many making only a handful of loans. By dollar volume, activity was once again driven by a relatively small number of dedicated multifamily lenders.”
Woodwell said last year’s numbers pointed to a “robust and diverse” multifamily lending environment. “But conditions have changed with the onset of the COVID-19 pandemic, the greatest being increased uncertainty,” he said. “Interest rates are now lower than they were a year ago, and data have yet to show any marked changes in property incomes or values. Demand for refinancing because of low rates, particularly for government-backed loans, is unlikely to overcome a drop in sales transactions, which means multifamily borrowing and lending is likely to drop this year.”
The MBA report is based on its surveys of larger multifamily lenders and recently released Home Mortgage Disclosure Act data that covers multifamily loans made by many smaller lenders, particularly commercial banks.
The $364.4 billion of multifamily mortgages originated last year went to a variety of investors. By dollar volume, the greatest share (38 percent of the total) went to the government-sponsored enterprises, Fannie Mae and Freddie Mac.
The top five multifamily lenders in 2019 by dollar volume were JP Morgan Chase & Company, Wells Fargo, CBRE, Berkadia and Walker & Dunlop.
The MBA 2019 Multifamily Lending Report is the most comprehensive view available of the multifamily lending market and includes:
- A detailed summary of the $364.4 billion multifamily market;
- Profiles of distinct market segments, including the very-small loan (loans of $1 million or less) lender segment;
- A breakout of 2019 multifamily lending volume by investor group;
- A listing of 2,589 lenders who made multifamily loans in 2019, including their lending volume; number of loans made and average loan size; and
- A listing of metropolitan areas and the volume of very-small loans made in each in 2019.
The report is based on data from the MBA 2019 Commercial Multifamily Annual Origination Volume Summation and HMDA. The MBA survey targets dedicated commercial/multifamily originators and covered $601 billion in commercial/multifamily loans in 2019. HMDA data adds multifamily loans from banks, thrifts and other institutions that meet certain single-family origination thresholds. The two datasets combined provide the most comprehensive assessment of the multifamily lending market available.