MBA data showed a steady but uneven picture across banks, GSEs and CMBS
Commercial and multifamily mortgage delinquencies ended 2025 on a mixed but broadly stable note, according to the Mortgage Bankers Association’s latest Commercial Delinquency Report. Banks, life companies and Freddie Mac logged modest improvement, while Fannie Mae and pockets of securitized debt remained under pressure.
Together, banks, CMBS trusts, life insurers and the government‑sponsored enterprises held more than 80% of outstanding commercial mortgage debt, making their performance a key barometer for credit conditions.
The fourth‑quarter snapshot followed a year in which commercial real estate stress built unevenly across the capital stack.
Earlier in 2025, Trepp commercial mortgage-backed securities report showed the CMBS delinquency rate pushing above 7% for the first time since 2021, a warning sign for lodging and multifamily loans.
An MBA “chart of the week” also pointed to continued strain in office and multifamily collateral even as other sectors held up better.
“Commercial mortgage performance remained generally stable in the fourth quarter of 2025, with most capital sources displaying modest improvements in delinquency rates,” said Reggie Booker, associate vice president of commercial research at MBA.
“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. While elevated stress in CMBS continues to reflect ongoing challenges in certain property sectors, overall loan performance remains resilient. In 2026, investors will be closely watching how refinancing pressures and economic conditions shape credit performance across capital sources.”
Banks and thrifts ended the quarter with 1.23% of commercial mortgages 90 days or more past due or in non‑accrual, slightly lower than in the third quarter.
Life company portfolios saw 0.32% of loans 60‑plus days delinquent, also down quarter‑over‑quarter.
Fannie Mae’s 60‑day‑plus delinquency rate edged up to 0.74%, while Freddie Mac’s fell to 0.44%.
CMBS loans 30‑plus days delinquent or in REO stood at 6.58%, essentially flat on the quarter and still several times higher than bank‑held levels earlier in the year.
Market participants framed that backdrop as a slow‑burn problem rather than a sudden shock.
“I think the issue of delinquencies is smoldering,” Nathan Cohen, head of the CRE division at LBC Capital Income Fund, previously told Mortgage Professional America.
“I think it’s going to be a massive problem.”
In a separate interview, Peachtree Group chief executive Greg Friedman described “a challenging market for commercial real estate in general as it recalibrates to the higher interest rate environment and the impact it’s having on debt service across these assets and the underlying value of assets.”
Construction and development loans were generally excluded from the MBA figures, even though regulators often grouped them under commercial real estate.
Bank statistics also captured some owner‑occupied properties, complicating one‑to‑one comparisons across capital sources.
Apart from CMBS and select sectors, commercial mortgage credit performance still looks manageable.
The real test, industry executives said, would come as a wall of maturities meet higher‑for‑longer interest rates in 2026 and beyond, forcing borrowers and their financiers to decide which properties remain worth new money and which ones would finally have to change hands.
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