Trepp: 25.3% of performing Texas floating-rate Agency multifamily balance reports sub-1.0x DSCR

$3.04 billion across 130 performing floating-rate Agency multifamily loans in Texas reported net cash flow DSCR below 1.0x, equal to 25.3% of the performing floating-rate balance, according to Trepp. The loans remain performing; the property cash flow reported is not enough to cover the debt service used in the DSCR calculation.

The 130 performing loans below 1.0x carry a balance-weighted NCF DSCR of 0.77x. That is close to the 0.72x for the delinquent floating-rate loans that report coverage, so the gap between the two groups is loan status rather than a materially different cash flow picture.

Of the 28 delinquent floating-rate loans, 15 report an NCF DSCR, and all 15 are below 1.0x. The remaining 13, representing 47.5% of the delinquent balance, report no NCF DSCR at all, which leaves coverage unknown for nearly half the delinquent dollars.

Loans securitized in 2021 and 2022 hold 87.5% of the delinquent floating-rate balance. That cohort is delinquent at 11.33%, roughly 8.4 times the 1.35% rate for loans securitized in other years.

Floating-rate Texas Agency loans pay a weighted-average coupon of 5.74%, against 4.66% for fixed-rate loans; the delinquent floating-rate loans pay 5.99%.

Floating-rate loans make up 21.3% of the Texas Agency multifamily balance but 55.8% of its $1.35 billion delinquent balance. Trepp puts the floating-rate delinquency rate at 5.89%.

Texas holds $150.10 billion of securitized multifamily debt, the second-largest state balance behind California, according to Trepp.