Agency Multifamily Lending Navigates Rising Delinquencies, Strategic Refinancing

By RadCRE Research · 2026-10-11 · Market Updates

Freddie Mac's serious multifamily delinquency rate hit 0.64% in August, its highest in over two decades, even as agencies expand their lending role [2].

Freddie Mac Reports Elevated Delinquencies Amidst Program Adjustments

The multifamily sector is currently experiencing heightened scrutiny as agency-backed loan delinquencies remain elevated, even as Fannie Mae and Freddie Mac continue to expand their presence in apartment lending [2]. Freddie Mac’s serious multifamily delinquency rate reached 0.64% in August, marking its highest level in more than two decades, according to the Mises Institute [2]. This trend serves as a cautionary signal for investors already contending with factors such as weak rent growth, rising operating costs, and challenging refinancing environments [2]. In contrast, Fannie Mae’s delinquency rate reportedly declined in August [2].

Despite the broader market concerns, Freddie Mac has continued to engage in active financing and program adjustments. On October 1, a new Refinance Test became effective for all new loans, indicating an ongoing adaptation of its lending criteria [1]. The agency recently announced a partnership with Lument and Wegman Companies to facilitate the refinancing of a 332-unit seniors housing community in the Finger Lakes Region of upstate New York [1]. This transaction highlights Freddie Mac's continued support for specific housing segments, including seniors housing.

Streamlined Structures Support Affordable Housing Initiatives

Beyond standard financing, Freddie Mac has demonstrated a commitment to affordable housing through specialized programs. The firm recently partnered with Cedar Rapids Bank and Trust Company to close its most recent M-Deal®, M-074, which utilized a streamlined M-Deal structure specifically designed to support affordable housing initiatives [1]. Such programs underscore the agencies' dual mandate to provide liquidity to the multifamily market while also addressing critical housing needs.

RadCRE Perspective

"The divergence in agency delinquency rates, with Freddie Mac's climbing to a two-decade high at 0.64% in August, signals a market under increasing pressure, particularly for certain asset classes and geographies [2]. However, the continued activity in new refinance tests and targeted programs, like the seniors housing deal in the Finger Lakes or the M-Deal® for affordable housing, shows the agencies are actively recalibrating and supporting specific niches [1]. This dynamic environment demands a nuanced approach, where investors must meticulously underwrite potential assets, focusing on sustainable operating costs and understanding the implications of new refinance requirements. We're advising clients to scrutinize existing loan maturities and leverage strategic partnerships to navigate these shifting waters, especially as capital remains conservative for non-stabilized assets."
— Majid Radaei, Founder & Principal Broker, RadCRE

Tags: multifamily market update, Freddie Mac delinquency, agency lending, CRE financing, affordable housing finance