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The performance of student housing properties that back commercial mortgage-backed securities has weakened in recent years and turned negative last year, according to Moody's, the credit ratings agency.
The current delinquency rate of nearly 3 percent for student housing securities loans is much higher than the rate for other multifamily properties, Moody's said. The sector now accounts for 40 percent of all multifamily delinquencies and only 6 percent of all multifamily loans outstanding.
However, most colleges with student housing backed by commercial mortgage-backed securities have relatively high enrollment growth rates, which will help limit continued credit erosion in the student housing sector.
