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By Erika Morphy/Globe St
Debt maturities in the U.S. affordable housing sector are set to climb steadily over the next decade, but a new Berkadia report drawing on Yardi Matrix data suggests the wall of expirations is more likely to test the system’s resilience than trigger a broad wave of distress. The findings point to rising refinancing risk in select metros and under certain capital structures, even as the combination of subsidies, programmatic debt and policy support continues to buffer fully affordable assets from the sharper stress seen in conventional multifamily.
According to the report, roughly $10.5 billion of commercial mortgages secured by fully affordable properties are expected to mature over the next three years, with the total rising to $21.7 billion by 2030 and $42.2 billion by 2035. The analysis, based on Yardi Matrix’s affordable housing database, covers about 26,000 properties and 3.5 million units in which at least 90 percent of apartments are subject to rent limits tied to some form of government subsidy, excluding mixed-income assets that blend affordable and market-rate units.
The near-term pressure is concentrated in a handful of metros. Among 140 markets tracked, Washington, D.C. leads with an estimated $668.2 million in affordable loan maturities through 2026, followed by Miami at $462.5 million, San Francisco at $370 million, Atlanta at $364.5 million and Houston at $276.9 million.
Those pipelines sit against a capital stack still dominated by commercial banks and government-sponsored enterprises, with smaller shares attributed to CMBS and other sources.
The report characterizes distress in affordable housing as “muted” relative to conventional multifamily, even as pockets of weakness emerge. Occupancy generally remains high, but bad debt has yet to return to pre-pandemic levels and is driving stress in certain markets where operating margins were already thin.
High development, insurance and maintenance costs, paired with a higher-for-longer rate environment, are eroding cash flow cushions and could complicate refinancing outcomes as loans roll in coming years.
At the same time, the study points to several structural offsets that have so far limited defaults. Affordable deals commonly benefit from below-market interest rates available through government programs, longer loan terms and subsidized revenue streams, particularly where operating subsidies like Section 8 vouchers sit on top of capital subsidies.