Why 2021-2022 Multifamily Loans Are Showing Stress First Article originally posted on Globe St. on January 28, 2026 On most headline metrics, institutional multifamily still looks healthy: demand is intact, rent growth has not collapsed and agency delinquency remains low by historical standards. Yet beneath those aggregates, a specific slice of loans is drawing attention inside credit committees and loan sale shops: the 2021–2022 vintages. Trepp’s research team has been flagging this cohort as the point where “post‑GFC conservative” underwriting met peak pricing, aggressive rent growth assumptions and an expense environment no spreadsheet anticipated. Speaking on a recent episode of The TreppWire Podcast, Steven Buschbaum, head of applied research and analytics at Trepp, described 2021 and 2022 as “the peak of the supply and origination wave” for agency multifamily. That is where, he said, “we saw probably some of the most aggressive underwriting for rent growth expectations.” The data now shows how thin that cushion was. Sub‑7% Debt Yields in “Conservatively Underwritten” Books To frame the risk, Buschbaum looked at one simple but telling metric: the share of Fannie Mae and Freddie Mac multifamily loans from those two years carrying a debt yield under seven percent. For Freddie Mac’s 2021–2022 cohort alone, that number is roughly $33 billion of loans with sub‑7 percent debt yields, a level he characterizes as “really concerning” for loans originated four to five years ago. For Fannie Mae, he put the comparable figure at about $30.7 billion, roughly a quarter of that two‑year book. Taken together, those 2021–2022 vintages account for only about a quarter of the combined Fannie and Freddie portfolios. Yet within that slice, the concentration of low-debt yields is striking. Strip those years out, and the share of loans below seven percent debt yield across the broader agency book drops to what Buschbaum estimates is in the 10 to 15 percent range. In other words, the weak link is not multifamily as an asset class, but a specific late‑cycle origination window when pricing, leverage and growth assumptions all lined up at the most optimistic end of the spectrum. What makes this more notable is that it emerged in an era when lenders routinely pointed to tighter standards as one of the key lessons of the global financial crisis. “The one thing that has been consistent across all lenders post‑GFC is just that underwriting standards are super tight,” said Lonnie Hendry, chief product officer at Trepp and co‑host of the podcast. Even so, he added, “pretty much across all lender types, those deals are not performing,” citing prices that were “way too high,” financials that did not reflect stabilized performance, and an “inflationary expense creep” that “has really just eroded at a level unprecedented” for many underwriting models. Expense Creep, NOI Pressure, and a Distorted Distress Picture The stress in these vintages is not primarily about vacancy blow‑outs or a collapse in fundamentals across the board. Buschbaum acknowledged “a multi‑decade record of supply” hitting the market over the last four years, with visible damage among late‑entry sponsors who used too much leverage and “too optimistic expectations of rent growth.” A number of those stories, particularly in the multifamily syndication space, have already made their way into major media coverage and into Trepp’s own case studies. But Hendry’s focus is on the cost side of the equation. Deals were often priced and underwritten based on trailing numbers that did not fully reflect post‑pandemic operating costs. As taxes, insurance, labor and utilities reset higher, thinly underwritten deals saw debt yields compress faster than expected, even where top‑line revenue held up. The result is a set of assets that can still cover debt service today, yet sit uncomfortably close to the edge in a higher‑for‑longer rate environment. For now, the official credit metrics remain benign. Hendry pointed to a Freddie Mac delinquency rate of roughly 50 basis points and said he “assumes” that a large portion of the sub‑7 percent-debt-yield loans are still current on payments. That combination—low delinquencies but a meaningful slice of loans with very thin yields—produces a distorted picture of distress. Executives scanning headline delinquency charts could conclude that agency multifamily is almost untouched by the rate shock, while those inside special servicing and loan sale desks are already seeing the problem loans concentrate in a narrow vintage band. What It Means for Sponsors, Lenders and Loan Buyers For sponsors, the 2021–2022 vintage problem is forcing a reckoning with late‑cycle risk management. Those who bought into aggressive rent growth stories with minimal cushion on expenses are finding that “market fundamentals have a way to kind of overrule what a spreadsheet says,” as Hendry put it. Equity top‑ups, JV recapitalizations or sales at a discount to replacement cost may be the only paths to avoid eventual transfer of control for some assets in this cohort. The fact that the broader market still views multifamily as a “very safe bet,” in Hendry’s words, may help on the bid side—but buyers are already segmenting by vintage, leverage and business plan. For lenders, Trepp’s team’s message is to be wary of averages. A quarter of the agency book carrying low debt yields is manageable, especially when the rest of the portfolio sits on much more comfortable cushions. But inside that quarter, the dispersion is wide. Loans originated from pro forma rents in high‑growth Sun Belt markets with floating‑rate debt and limited rate protection are a different risk than stabilized, fixed‑rate assets in supply‑constrained coastal markets, even if the reported debt yields look similar. As Buschbaum noted, “there’s obviously a lot more you want to know to paint the full picture” than a single threshold metric can capture. Loan buyers, meanwhile, are already positioning around this vintage band. Distressed traders and opportunistic funds are increasingly targeting 2021–2022 multifamily paper where they can underwrite today’s NOI, reset the capital stack and price in additional expense pressure over the hold period. At the same time, traditional buyers of clean agency bonds may take comfort from the fact that, outside of this cohort, weighted‑average debt yields on loans maturing in 2026 are roughly a full percentage point higher than in prior years, according to Buschbaum’s broader maturity analysis. Trepp’s researchers are careful not to sound alarmist. Buschbaum said he is “optimistic” and “hopeful,” stressing that his view will remain “data-driven” as the next three to five years play out. Hendry, for his part, is “shocked” by the scale of low‑yield exposure but sees it as a reminder that even improved underwriting cannot fully insulate lenders from late‑cycle exuberance. For multifamily investors, the lesson is familiar but timely. The real risk often lies not in the asset class, but in the vintage.