The Mortgage Bankers Association’s latest Commercial Delinquency Report indicates that commercial mortgage performance was uneven across capital sources in the first quarter of 2026. While overall conditions remain relatively stable, delinquency movements varied notably by lender type and product.
CMBS loans posted the highest delinquency level among major lender groups, with a rate of 7.28% at the end of Q1 2026. CMBS also recorded the largest quarter-over-quarter change, rising by seven percentage points from the previous quarter. The report characterizes these increases as a sign of mounting stress in segments of the commercial real estate market that are more exposed to capital markets volatility and refinancing headwinds.
Agency and portfolio lenders showed a more modest shift. Freddie Mac’s share of loans 60 or more days delinquent came in at 0.43%, edging down by 0.01 percentage points from the fourth quarter of 2025. This small decline suggests that Freddie Mac’s multifamily and other commercial portfolios have remained comparatively resilient despite higher borrowing costs.
Banks and thrifts reported a 1.24% delinquency rate for loans that were 90 or more days past due or in non-accrual status, representing an increase of 0.01 percentage points from the prior quarter. The uptick was minimal, indicating that banking institutions’ commercial mortgage books are, on balance, holding steady, even as specific property types and borrowers face refinancing pressure.
Life company portfolios saw delinquency rates of 0.38% for loans 60 or more days past due, a quarterly increase of 0.06 percentage points. Although the level remains low relative to CMBS, the movement points to some incremental stress for insurance company lenders that traditionally target lower-risk commercial properties.
Fannie Mae reported a 0.78% delinquency rate for loans 60 or more days delinquent, an increase of 0.04 percentage points from the end of 2025. The rise in Fannie Mae delinquencies, while from a low base, adds to evidence of pockets of softness within parts of the commercial and multifamily sectors.
Reggie Booker, associate vice president of commercial research at the Mortgage Bankers Association, noted that loan performance diverged by capital source over the first three months of 2026. He cited higher borrowing costs, refinancing challenges, and weaker conditions in some commercial real estate segments as key drivers of the increases in CMBS and Fannie Mae delinquencies. At the same time, Booker highlighted that delinquency rates for bank and Freddie Mac loans were stable or improved, emphasizing the broader resilience of the commercial mortgage market even as stress builds unevenly across lender types.
