Multifamily Lending : Q3 2015
In the wake of the great recession, the entire financing environment shifted to benefit the multifamily industry. As such, MPF Research will provide high-level, but relevant updates on an on-going, quarterly basis. These updates include details on loan balances by lending category, overall market share, delinquency rates, as well as activity from Fannie Mae and Freddie Mac.
Overall, the Banks’ appetite for apartments continues to grow at a rapid pace. As of 3rd quarter 2015, multifamily lending activity continues to outpace other types of bank lending, yielding a rate of 1.56. Commercial & Industrial and Commercial Real Estate were positioned second and third, respectively.
The GSE/Agency category lending continues to lead other categories by overall market share of almost 42%. The Banks ranked second with 33% of overall market share. More significantly, the Banks grew 13.1%, compared to 6.8% growth from the GSE/Agency category. As with last quarter, REITs recorded the greatest year-over-year growth of 210%, though REITs own a very small share of the market (0.9%).
Freddie Mac reported $10.9 billion of new business in 3rd quarter 2015, yielding an increase of 55.7% from last year. Overall, Freddie Mac has reported $47.4 billion of new business year-ending October 2015. Further, Fannie Mae reported $7.2 billion of new business in 3rd quarter, translating into a contraction of 20.9% from the same time last year. Overall, Fannie Mae has logged $43 billion of new business over year-ending October 2015. Production volume is expected to cool as the FHFA has pumped the brakes on lending to the conventional multifamily market, though expanded lending opportunity in the affordable space.
Multifamily Market Share
Market share for total multifamily lending is led by JP Morgan Chase with 17.3% as of 3rd quarter 2015, tightening its share 45 basis points from last quarter. This translates in $56.7 billion, just 7% of the firm’s total loan balances. New York Community Bancorp ranks second in terms of overall market share (7.5%) and first for greatest exposure to multifamily (65.7%). The bank has $24.6 billion in multifamily assets on its balance sheet.