As the multifamily industry turns the page to 2026, the lending environment is defined less by scarcity and more by selectivity. Capital is plentiful, and the government-sponsored enterprises’ (GSEs’) lending caps have expanded; however, lenders are being more strategic and disciplined.
“Big picture, if you look at the multifamily lending market right now, it’s clear we’re in a very different place than just a couple of years ago. There’s plenty of capital out there, but it’s not being handed out on autopilot—lenders are much more thoughtful and strategic about how to deploy it,” says Josh Bodin, senior vice president, capital markets strategy and trading at Berkadia. “Instead of a one-size-fits-all approach, we’re seeing each lender type really play to its strengths, get creative, and compete in ways that go beyond just offering the lowest rate.”
Edward Corbett, executive managing director and head of multifamily debt and structured finance strategy at Newmark, adds he is optimistic about lending activity in 2026.
“The Mortgage Bankers Association projects an 18% increase in multifamily loan originations from 2025 to 2026. We concur given strengthening investment sales activity, a substantial wave of loan maturities, and the recent expansion of agency lending caps to $88 billion each,” he notes. “Together, these catalysts point to a very active year ahead.”
Geri Borger Urgo, president of agency lending at NewPoint Real Estate Capital, says the shift from 2025 to 2026 is more about a change in mindset, with borrowers, lenders, and investors recalibrating expectations around pricing, leverage, and proceeds after prolonged volatility.
“That reset was necessary, and it slowed activity. As we move into 2026, those expectations are better aligned, which allows the market to function more efficiently,” she says. “The environment remains disciplined, but it feels more constructive, with capital focused on execution rather than waiting for conditions to materially change.”
Still, several concerns that could impact lending activity this year remain top of mind for the lenders, including weak property performance, slow lease-up, and uncertain rent growth, especially in markets with an influx of deliveries.
“The gap between buyer and seller expectations continues to limit transaction volume,” notes Bodin. “Interest rate volatility and potential policy shocks, such as unexpected moves by the Federal Reserve, inflation surprises, or geopolitical events, could disrupt the anticipated path of rate cuts, keeping borrowing costs elevated and slowing deal activity.”
Borger Urgo adds that extended uncertainty could slow decision-making across the market. In terms of macro concerns, she says she’s paying attention to the cracks in the job market that are beginning to show, which could have downstream implications on property performance this year.
Looking ahead to the remainder of the year, the lenders weigh in on who will be most active in the space, the wave of maturities, and their advice for borrowers.
Debt Options
The commercial real estate debt market is on the upswing, creating opportunities across the board, according to Bodin.
With the Federal Housing Finance Agency increasing the GSEs’ lending caps, along with the exclusion of workforce housing from the caps, Fannie Mae and Freddie Mac are expected to remain dependable for the space or become even more prominent.
“That reliability is important as borrowers work through refinancing activity and upcoming maturities,” notes Borger Urgo.
Bodin notes that life companies are increasing allocations and can tighten terms, while construction floaters remain selective but available for strong sponsors. He adds debt funds and collateralized loan obligation channels also remain extremely liquid with support from bank warehouses.
In addition to debt funds, Borger Urgo adds that alternative lenders also are playing a role, particularly for transitional assets.
“Borrowers are approaching those structures with greater discipline around pricing, leverage, and exit assumptions,” she notes. “Across the board, certainty and execution are taking priority over aggressive structures.”
According to all three lenders, banks are back in the market in an active way; however, they are generally being more selective and focusing on existing relationships.
Corbett adds there “is still a tremendous amount of ‘gap capital’ in the market,” including bridge, mezzanine, and preferred debt.
“With more debt available than transactions in the market, borrowers can benefit from competing capital providers,” he says.
Maturities Loom
Newmark research shows almost $770 billion in multifamily mortgages maturing between 2025 and 2027, according to Corbett.
“While that number is large, it is a much smaller subset of loans that we’ve identified as troubled. Particularly troubled are those loans originated post-2016 and with non-agency lenders willing to push credit limits,” he says. Corbett adds that lenders have more data points to make decisions today and will be less inclined to continue providing extensions, creating the potential for more forced sales than in prior years.
Bodin notes the large volume of multifamily and commercial real estate loans maturing in 2026 and 2027 creates risk if values don’t recover or rates don’t fall as expected, with lenders concerned about sponsors’ ability to refinance at current leverage levels, especially in oversupplied or underperforming markets.
“The maturity wave creates a perfect storm for borrowers who financed deals during peak valuations and historically low rates. Many will face refinancing gaps as current leverage levels collide with tighter underwriting standards, higher debt-service requirements, and lingering softness in property values,” he says. “Markets with oversupply or muted rent growth will feel this pressure most acutely, and sponsors with floating-rate debt or short-term structures may struggle to bridge the gap without fresh equity.”
Borger Urgo and Bodin both urge proactive engagement.
“Borrowers who engage early, assess asset performance honestly, and remain flexible tend to preserve more options and better outcomes,” says Borger Urgo. “Delaying decisions in hopes of improved conditions often narrows those options rather than expands them.”
Bodin adds to stress-test portfolios under conservative rates and valuation assumptions to identify potential shortfalls.
“Where feasible, consider recapitalization strategies—bringing in preferred equity or joint-venture partners—to preserve liquidity,” he advises. “Finally, prioritize assets in strong job-growth markets and highlight durable fundamentals like occupancy, rent growth, and cash flow stability to differentiate in a competitive environment.”
Markets Aren’t All Equal
When it comes to geographic markets, the lenders are cautious regarding those experiencing a recent influx in supply. Markets such as Austin, Texas, and Atlanta require careful underwriting, particularly where absorption has taken longer than expected, says Borger Urgo.
“These markets are not off limits, but assumptions around lease-up and rent growth need to reflect current conditions,” she says. “Assets with deferred maintenance or thin operating margins also deserve closer scrutiny, especially as operating costs remain elevated and execution risk becomes more pronounced.”
Bodin says strong property performance in the Midwest, which has seen lower supply pipelines, along with reasonable cap rates make it an attractive region for investors now. For those looking for a strong basis relative to replacements, they also can find that in the Sun Belt.
“While many markets are still working through absorption of current supply levels, it has favorable demand characteristics over the longer term, which is keeping investors interested in these markets,” he says. “Lenders want to be in markets where the demand picture is strong, and supply is being absorbed. They’re focused on sponsorship quality and want to back deals with proven operators in markets where rent growth is sustainable and the fundamentals support long-term stability.”
Borger Urgo adds well-located assets with stable occupancy and clear business plans continue to attract capital.
“Workforce housing stands out given persistent affordability challenges and steady demand across many regions,” she says. “Cap rates for this asset type have also expanded significantly from the compression to Class A values that we saw in 2022 and 2023.”
Feedback for Borrowers
The lenders have several pieces of advice for borrowers to get their deals to the finish line, including be patient, start early, and focus on the fundamentals.
“Successful outcomes are driven by preparation and transparency. Clear financial reporting, realistic assumptions, and early dialogue allow lenders to structure solutions that align with asset performance and borrower objections,” advises Borger Urgo. “Sponsors who engage lenders earlier in the process typically create more flexibility and smoother execution paths. In the current environment, collaboration often determines whether a deal closes efficiently or struggles to move forward.”
Bodin notes the importance of working closely with lenders to underwrite deals using realistic rent growth and absorption assumptions as well as being patient and strategic.
“We advise being conservative with future NOI projections and stress-testing for scenarios like slower lease-ups or flat rents,” he says. “And if the bid/ask gap is too wide, consider refinancing and holding rather than forcing a sale. With an abundance of debt options available, maintaining discipline is crucial.”
Corbett adds in addition to being patient, allow enough time to transact.
“By giving a transaction a larger window for execution and decision-making, you will be able to strike opportunistically,” he says.