Bank Multifamily Delinquencies Dip as Credit Losses Rise

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Bank-held multifamily delinquencies fell to 1.41% in Q2 2026 from a multi-year high of 1.47% in Q1.

Early-stage delinquencies improved, but 90-plus-day delinquencies rose to 1.10% and annualized net charge-offs reached 0.32%.

CRED iQ property data showed operating expenses growing faster than income at the median securitized multifamily property.

CRED iQ's Q2 analysis of bank multifamily credit found that delinquencies eased to 1.41% from 1.47% in Q1. The FDIC-based data cover all insured institutions. Bank multifamily portfolios grew 3.6% year over year to $667.6B, while delinquent loan balances fell to $9.41B from $9.78B.

The improvement was concentrated in earlier-stage trouble. Loans 30 to 89 days delinquent fell to 0.31% from 0.40%. However, 90-plus-day delinquencies increased to 1.10% from 1.07%. Net charge-offs also rose to an annualized 0.32%, more than double the 0.13% banks charged off during all of 2025. CRED iQ described that combination as consistent with a workout-driven cycle rather than a fully resolving one.

The Q2 delinquency rate is still about 6.7 times the 2019 low of 0.21%, though it remains well below the 5.90% Global Financial Crisis peak. The dollar value of delinquent loans fell during the quarter even as the most serious delinquency bucket moved higher. That divergence is another reason the headline rate does not capture the full credit picture.

Property-level results help explain why the headline improvement may prove fragile. CRED iQ separately analyzed securitized multifamily loans with updated financials reported in June 2026. At the median property, effective gross income increased 0.6%. Operating expenses grew 1.5%, or about 2.5 times as fast. NOI rose only 0.2%. Expenses outpaced income at 57% of properties, and 48% recorded an outright NOI decline. That multifamily NOI pressure can reduce the cushion available for rate resets or maturity refinancing. A loan with weakening cash flow has less room to absorb higher debt costs or tighter proceeds tests.

Denver, Seattle and San Francisco showed the weakest combination of trends in the property dataset. Those markets paired below-average income growth with above-average expense growth, producing the sharpest NOI erosion in the sample. Dallas and Austin showed a different pattern.