Five Large Lenders Fueled Golden Age of Multifamily Lending

Lending for multifamily housing in buildings with five or more units increased by 33 percent in 2012 according to the Mortgage Bankers Association (MBA).  The volume of new mortgages for this purpose totaled 146.1 billion and echoed data from the Census Bureau and other sources showing an especially strong come back in multi-family construction, especially in the early part of the year.

While 2,803 different lenders were involved in the loans, 67 percent made five or fewer such loans during the year.  Forty percent of the dollar volume went to the two government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.  In terms of number of loans commercial bank, thrift, and credit union portfolios had 80 percent of the market.   The five largest lenders by dollar volume were JP Morgan Chase Bank, Wells Fargo, CBRE Capital Markets, Walker & Dunlop, and Berkadia. 

"In many ways we were in a golden age of multifamily finance in 2012, that to a large extent continues today," said Jamie Woodwell, MBA's Vice President of Commercial Real Estate Finance.  "Low interest rates, strong property fundamentals and increasing multifamily property prices are all supporting a very favorable lending environment.  The 33 percent increase in lending volume in 2012 brought levels nearly back to where they had been in 2007."

The MBA report is based on data from the MBA 2012 Commercial Multifamily Annual Origination Volume Summation and the Home Mortgage Disclosure Act (HMDA) and is for sale on the MBA website.