Multifamily lending jumps to record high, growth expected through 2020

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Rising demand and plummeting mortgage rates pushed multifamily origination dollar volume above 2017's record to a new peak, according to the Mortgage Bankers Association.

Multifamily loans totaled over $339.2 billion in 2018 — an annual swell of 19% — breaking the previous record of $285 billion set the year prior. The dollar volume steadily inclined every year since 2009 and is forecast to continue rising throughout 2020.

"Borrowing and lending backed by multifamily rental properties set a new record in 2018, driven by strong property fundamentals, rising property values, low interest rates, and strong demand from both borrowers and lenders," Jamie Woodwell, the MBA's vice president of commercial real estate research, said in a press release. "We've seen these trends continue throughout 2019 and expect multifamily borrowing and lending will rise again both this year and next."

A surge in total loans drove the growing volume. There were 57,200 multifamily loans originated by 2,669 firms in 2018, year-over-year jumps of 28% and 4%, respectively, from 44,623 and 2,554 in 2017.

Of 2018's loans, 27% were $1 million or less, 26% were between $1 million and $3 million, 30% were between $3 million and $10 million, and 17% were over $10 million.

Fannie Mae and Freddie Mac occupied the greatest share of end investment. The GSEs comprised 42% or over $142.3 billion of the volume.

Wells Fargo, CBRE Capital Markets and JPMorgan Chase repeated in 2018 as the top three multifamily lenders by total dollar volume. They combine to account for $59.7 billion of all volume and 7,302 in multifamily loans last year.

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Multifamily Commercial mortgages Originations CRE Mortgage rates GSEs Mortgage Bankers Association