After reporting a blockbuster year for commercial mortgage lending in 2025, the Mortgage Bankers Association (MBA) says first-quarter commercial and multifamily loan origination volumes tumbled 30% from the fourth quarter amid robust year-over-year growth.
The dollar volume of loans produced for multifamily properties was 49% higher than a year ago, while health care properties saw a 209% annual increase and retail property originations were up 148%. Commercial mortgages for industrial properties rose 56%.
Overall, commercial and multifamily loan origination volumes were 52% higher than a year ago in the first quarter, with a shift in liquidity source catching the attention of Reggie Booker, associate vice president of commercial research at the MBA.
“The most notable increase was the 80% rise in depository lending, driven in part by the large volume of bank-held loans maturing this year and the need to refinance those positions,” said Booker in remarks accompanying Thursday’s data release.
He also directly addressed the quarterly and annual divergence in lending volumes, calling the slowdown “consistent with typical first-quarter seasonality” that the trade group believes “does not detract from the broader improvement in market conditions.”
Multifamily originations declined 28% from the fourth quarter, as did office property and industrial property loan volumes. Health care properties observed a 70% quarterly increase compared to 3% growth for hotel properties and a 5% decline for retail units. Office property loan originations declined 2% compared to the fourth quarter.
The MBA reported that five capital sources hold more than 80% of outstanding commercial mortgage debt: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies and Fannie Mae and Freddie Mac.
The dollar volume of originations for “investor-driven lenders” jumped 133% annually in the first quarter, followed by an 80% increase in loans for depositories. Flows of commercial mortgages to Fannie and Freddie rose 38% from a year ago, accompanied by a 9% increase in loans to life insurance companies and a 14% contraction in CMBS originations.
All investor types, however, posted quarterly declines in the dollar volume of their commercial and multifamily originations, which declined 37% from the fourth quarter on aggregate.
According to first-quarter earnings reports, Fannie Mae saw its multifamily acquisitions decline to $17.1 billion from $25.8 billion in the fourth quarter. Freddie Mac’s new multifamily business activity shrank to $13 billion from $29 billion in the fourth quarter and $25 billion in the third quarter, despite rising 30% from the $10 billion reported a year ago.
Fannie’s $74 billion in multifamily financing in 2025 reflected 34% growth from $55 billion in 2024, while Freddie’s $77 billion in production was a 17% increase from 2024. Multifamily purchase caps were increased more than 20% from 2025 levels to $88 billion per agency for 2026, preparing the mortgage giants to sustain multifamily originations growth this year.
