Multifamily Lending Enters ‘New Phase of Stress’ Article originally posted on Globe St. on February 24, 2026 After years of stability, the multifamily lending market is showing unmistakable signs of strain. By the third quarter of 2025, delinquency rates had climbed to levels not seen since the global financial crisis, signaling, as CRED iQ described, a “new phase of stress” sweeping through the sector. According to the firm’s analysis, data from community, commercial and savings banks—not CMBS activity—show overall multifamily delinquency reaching 1.37% in Q3 2025, the highest level since 2008 and well above the sub-0.4% range seen between 2017 and mid-2022. That period benefited from low interest rates, strong rent growth and ample capital. The shift in just two years has been striking. Overall delinquency stood at 0.40% in the third quarter of 2023, then nearly doubled to 0.97% a year later before reaching 1.37% in 2025—a 3.4-fold increase. In dollar terms, the total balance of delinquent multifamily loans surged from $2.4 billion to $8.9 billion over that 24-month period, a $6.5 billion jump. Losses provide another measure of stress. Bank-reported multifamily loss rates, largely dormant between 2017 and 2021, rose to 0.08% (about $504 million) by the third quarter of 2024 and nearly doubled to 0.14% (around $911 million) a year later. While far below the 1.24% cumulative losses recorded at the height of the GFC, CRED iQ noted that the pace of deterioration is now faster than it was then. The acceleration stems from widespread floating-rate exposure, expanding cap rates and concentrated value declines tied to specific markets and loan vintages. CRED iQ’s data points to several practical implications. Lenders will need to intensify asset management, relying on workouts, loan modifications and note sales to stabilize portfolios in the coming 12 to 24 months. Investors may view the growing distress as an entry point for opportunistic deals, but disciplined underwriting remains essential—especially given the heightened risks associated with overleveraged 2021–2022 debt. For brokers, monitoring where distress clusters—by lender type, loan vintage or geography—will be key to uncovering off-market opportunities in a tightening landscape.