Banks are reporting that lending standards on commercial real estate loans have recently been more restrictive. On the residential lending side, demand is on the increase.
For loans eligible for purchase by the government-sponsored enterprises, 11 percent of banks said credit standards had eased. The rest said they were mostly unchanged.
Twenty-nine percent of the surveyed financial institutions indicated that demand for GSE loans has strengthened
since the last survey was conducted three months previous.
Those were among the findings from the October
2016 Senior Loan Officer Opinion Survey on Bank Lending Practices released Monday by the Federal Reserve Board.
Responses were obtained from 69 domestic banks and 21 U.S. branches and agencies of foreign banks.
On government residential loans, however, almost all of surveyed financial institutions indicated that credit standards have remained basically the same.
Demand for government-insured and -guaranteed mortgages has increased
at nearly 16 percent of banks. But weaker demand was noted by a fifth of large banks — those with at least $20 billion in assets.
For most other types of home loans, at least 90 percent of banks indicated no substantial changes to credit standards.
The report indicated that demand was up at 15 percent of banks for QM non-jumbo that are ineligible for GSE acquisition. On QM jumbo loans, demand was up at 35 percent of large banks and 17 percent of smaller banks. Demand for non-QM jumbo
mortgages strengthened at 28 percent of large banks and 15 percent of small banks. Just 13 percent of banks indicated stronger demand on non-QM non-jumbo mortgages.
Of the four banks that reported making subprime mortgages, one said demand was substantially weaker and the rest indicated no change in demand.
None stated standards had changed.
While there has been no change in lending requirements for home-equity lines of credit at most banks, demand for HELOCs was higher at 30 percent of banks, though 11 percent of large banks indicated weaker HELOC demand.
Commercial Real Estate
On non-farm CRE loans, credit requirements were tighter at more than a quarter of large banks and 13 percent of smaller banks. Demand for commercial mortgages was stronger at 15 percent of large banks and a tenth of smaller banks, while 15 percent of large banks said demand was weaker.
Multifamily lending standards were tighter at 45 percent of all banks. Demand for apartment loans was up at 17 percent of banks and down at 14 percent.
Credit standards on construction-and-development loans tightened at 30 percent of banks, with 36 percent of large banks seeing tightening.
At the same time, 18 percent of large banks and 37 percent of smaller banks noted stronger C&D demand, while 23 percent of large banks indicated weaker demand.
