Multifamily CRE Meltdown Keeps Getting Uglier
6th November 2026
There are about $2.3 trillion in multifamily commercial real estate (CRE) loans out there, backed by buildings with rental apartments. The US government, via Fannie Mae and Freddie Mac, holds about $1.2 trillion of that. Fannie and Freddie have become very aggressive multifamily CRE lenders. So, dear taxpayer, you’re on the hook for about half of the multifamily CRE debt.
The rest is held around the globe by banks, insurance companies, real estate funds, alternative asset managers – a melted-down mortgage just hit Bridge Investment Group, a unit of PE giant Apollo (more on that in a moment) – holders of Commercial Mortgage-Backed Securities (CMBS) and Collateralized Loan Obligations (CLOs).
All of them have gotten hit by melted-down mortgages as the higher interest rates make it just about impossible to refinance the balloon payments when they come due on fixed-rate loans, or even make interest payments on variable-rate loans pegged to SOFR, which jumped when the Fed started hiking its policy rates. The result has been wave after wave of multifamily defaults, and it keeps getting worse.
Fannie Mae (FNMA) and Freddie Mac (FHLMC) are government entities designed to promote home ownership. What they mainly promote is mortgage fraud. As with most such government programs (like student loan guarantee programs), they only make things worse.