The Mortgage Bankers Association’s (MBA) monthly CREF Loan Performance Survey showed delinquency rates for mortgages backed by commercial and multifamily properties decreased in April.

This survey collects information on commercial and multifamily mortgage portfolios and was developed to better understand the effect the pandemic has had on commercial mortgage loan performance. In April, participants reported on $2 trillion of loans, representing approximately half of the total $3.9 trillion in commercial and multifamily mortgage debt outstanding.

“Commercial and multifamily mortgage delinquency rates declined in April but remain elevated overall, driven by the ongoing challenges facing many hotel and retail properties,” Jamie Woodwell, MBA vice president of commercial real estate research, said in a release.

“New and early-stage delinquencies have fallen significantly from earlier in the pandemic, but later-stage delinquency rates have stayed high, as lenders and servicers work through the options for troubled properties,” he continued. “Vaccine rollouts, strong consumer balance sheets, and pent-up demand are all positive signals, both for new delinquencies and for working out troubled properties.”

According to the survey, the number of commercial and multifamily mortgages that were not current in April was at its lowest level since April 2020. The percentage of outstanding loan balances that were current went up 0.1 percent since March 2021, making the total 95.1 for April 2021. As for other statistics: 3.2 percent of commercial and multifamily mortgages were 90 or more days delinquent or in REO (real estate owned), unchanged from the previous month; 0.3 percent were 60 days to 90 days delinquent, unchanged from the previous month; 0.4 percent were 30 days to 60 days delinquent, down 0.1 percent from March 2021, and 1.1 percent were less than 30 days delinquent, up from 0.9 percent the month before.

Loans backed by lodging and retail properties are under the greatest stress, MBA said, but are also seeing the most improvement. The balance of lodging loans that were delinquent in April went down 0.3 percent compared to a month earlier (20.2 percent in April 2021 from 20.5 percent in March 2021). The balance of retail loan balances that were delinquent in April also went down, from 9.5 percent in March to 9.3 percent in April.

Non-current rates for other property types went up a modest degree: an increase of 0.7 percent for industrial property loans (1.9 percent from 1.2 percent) and 0.2 percent for office property loans (2.6 percent from 2.4 percent). The percentage of multifamily balances that were non-current decreased, from 1.8 percent to 1.7 percent.

Commercial mortgage-backed securities (CMBS) loan delinquency rates are higher than other capital sources because of the concentration of hotel and retail loans, MBA said. However, there was still a decrease in the number of CMBS loan balances that were non-current, 8.5 percent in April 2021, down from 8.7 percent the month before.

For other capital sources, non-current rates were as follows: 2.1 percent for Federal Housing Administration multifamily and health care loans, unchanged from the prior month; 2 percent of life company loans, up from 1.6 percent in March 2021; and 1.1 percent of government sponsored enterprise loan balances, down from 1.2 percent.