Life insurance company mortgage portfolios recorded a delinquency rate of 1.33%, up from 1.19%, while government-sponsored enterprise (GSE) loans saw a smaller increase to 1.16% from 1.11%. Federal Housing Administration (FHA) loans were the exception, with their delinquency rate declining to 0.90% from 1.06%.
Delinquency rates also varied by property type, with office loans continuing to record the highest levels. MBA identified challenges in the multifamily market as another factor affecting loan performance.
Earlier CMBS delinquency data from Trepp also showed repayment stress across office and multifamily properties, with some borrowers struggling to refinance loans that had reached maturity. These conditions can complicate refinancing because weaker property income or lower valuations may reduce the amount lenders are willing to finance, even when borrowers have maintained their payments.
The Federal Reserve’s May 2026 Financial Stability Report similarly identified refinancing difficulties as a potential source of distressed commercial property sales when borrowers cannot secure replacement financing.
Still, lending conditions are not tightening across the board. The Federal Reserve’s July 2026 Senior Loan Officer Opinion Survey found that banks generally eased commercial real estate lending standards during the second quarter, although standards remained relatively tight by historical measures.
