For the second straight quarter, the Mortgage Bankers Association (MBA) described commercial and multifamily mortgage performance as “mixed” for major investor groups amid persistent challenges in specific property sectors.
“Overall loan performance remains resilient,” noted Reggie Booker, associate vice president of commercial real estate research at the MBA, in a Tuesday press release accompanying the trade association’s fourth-quarter commercial delinquency report.
Five capital sources control more than 80% of outstanding commercial mortgage debt: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies and the government-sponsored enterprises Fannie Mae and Freddie Mac.
The MBA underscored in its quarterly report that because each capital source tracks delinquencies “in its own way,” delinquency rates are not directly comparable from one capital source to another. Loans receiving payment forbearance are reported delinquent by Fannie Mae, for example, while Freddie Mac does not report those loans as delinquent if the borrower is in active compliance with the forbearance agreement.
In the last three months of 2025, CMBS delinquency rates were essentially unchanged from the third quarter at about 6.58% but remained well above the 5.78% rate in 2024.
Delinquency rates for commercial mortgages held by Fannie and Freddie moved in opposite directions, with Fannie Mae posting a 0.06% increase in delinquencies from the third quarter and Freddie Mac recording a quarterly decrease of 0.07%. That landed their respective fourth-quarter delinquency rates at 0.74% and 0.44%.
“Delinquencies for Fannie Mae loans increased for the second straight quarter and are now above the midpoint of their historical range going back to 1996,” added Booker.
Delinquency rates on commercial mortgages held by banks and thrifts largely plateaued on a quarterly and yearly basis, declining 0.04% from the third quarter to land at 1.23%. That represents a slight year-over-year improvement but remains more than double the 0.45% delinquency rate from the end of 2022.
Commercial delinquencies on life insurance company portfolios decreased 0.15% from the third quarter to 0.32%, down from 0.43% a year ago but roughly triple the 0.11% rate in the fourth quarter of 2022.
“In 2026, investors will be closely watching how refinancing pressures and economic conditions shape credit performance across capital sources,” Booker concluded.
