The most recent Commercial Delinquency Report from the Mortgage Bankers Association (MBA) shows that commercial mortgage delinquencies rose in Q2 of 2025.
“The delinquency rate for commercial mortgages increased in the second quarter of 2025 across most major capital sources,” said Reggie Booker, MBA’s Associate VP of Commercial Real Estate Research. “The largest increase was among CMBS loans, driven by rising delinquencies in both multifamily and office properties. Delinquency trends continue to reflect differences in property type, loan structure, geography, and borrower profile.”
The top five capital sources—commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, and Fannie Mae and Freddie Mac—are examined in MBA’s quarterly research of commercial default rates.
Collectively, these investors own about 80% of the outstanding debt from commercial mortgages. Each capital source’s metrics for monitoring loan performance are included in MBA’s analysis. Delinquency rates are not directly compared between groups since each tracks delinquencies differently. For instance, Freddie Mac does not include loans that are in payment forbearance provided the borrower is adhering to the forbearance arrangement, but Fannie Mae classifies such loans as delinquent.
Measuring the State of U.S. Delinquencies
At the end of Q2 of 2025, the delinquency rates for each group were as follows, based on the unpaid principle balance (UPB) of loans:
- Banks and thrifts (90 or more days delinquent or in non-accrual): 1.29%, an increase of 0.01 percentage points from the first quarter of 2025;
- Life company portfolios (60 or more days delinquent): 0.51%, an increase of 0.04 percentage points from the first quarter of 2025;
- Fannie Mae (60 or more days delinquent): 0.61 percent, a decrease of 0.02 percentage points from the first quarter of 2025;
- Freddie Mac (60 or more days delinquent): 0.47%, an increase of 0.01 percentage points from the first quarter of 2025; and
- CMBS (30 or more days delinquent or in REO): 6.36%, an increase of 0.45 percentage points from the first quarter of 2025.
Although construction and development loans are frequently supported by single-family residential development projects rather than office buildings, apartment buildings, shopping malls, or other income-producing properties, they are typically not included in the figures provided in this report but are included in many regulatory definitions of “commercial real estate.” Loans secured by owner-occupied commercial properties are included in the FDIC delinquency rates for bank and thrift-held mortgages that are presented here.
Note: Appendix A provides specifics on how the delinquencies measurements differ from one another.
To read more, click here.
