Bank Multifamily Delinquencies Ease to 1.41% as Credit Losses Climb
Macro
Bank-held multifamily delinquencies fell to 1.41% in Q2 2026 from a multi-year high of 1.47% in Q1, according to CRED iQ's analysis of FDIC-based data covering 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, with loans 30 to 89 days delinquent falling to 0.31% from 0.40%, but 90-plus-day delinquencies rose to 1.10% from 1.07% and annualized net charge-offs reached 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, and noted the Q2 rate remains about 6.7 times the 2019 low of 0.21% though well below the 5.90% Global Financial Crisis peak. In a separate analysis of securitized multifamily loans with updated financials reported in June 2026, CRED iQ found operating expenses growing faster than income at the median property, with effective gross income up 0.6%, operating expenses up 1.5% and NOI up only 0.2%; expenses outpaced income at 57% of properties and 48% recorded an outright NOI decline. Denver, Seattle and San Francisco showed the weakest combination of trends, pairing below-average income growth with above-average expense growth, while Dallas and Austin saw NOI softness tied more to weak income growth than rising costs. CRED iQ stressed that its securitized property dataset is separate from the FDIC universe of bank-held multifamily loans, and said the next quarter's bank call reports and property fundamentals will determine whether Q2 was a true inflection point or a temporary pause.
