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WASHINGTON, DC-The level of commercial/multifamily mortgage debt outstanding decreased in Q3, to $3.43 trillion, based on the Mortgage Bankers Association’s analysis of the Federal Reserve Board Flow of Funds data. That is a 0.8% drop from Q2 2009, or $28 billion. Multifamily mortgage debt outstanding dropped to $912 billion, a decrease of $1 billion or 0.1 percent from second quarter.

However the overall amount of mortgage debt outstanding that is backed by commercial/multifamily properties has remained relatively unchanged due to increased holdings by banks and thrifts and the GSEs, according to a statement by Jamie Woodwell, MBA’s vice president of Commercial Real Estate Research.

While the top line numbers from the Fed reflect a drop in the holdings of banks and thrifts, once construction loans are excluded, this group actually increased its holdings of loans backed by commercial and multifamily properties.

“Coupled with increases in the holdings of multifamily mortgages by Fannie Mae and Freddie Mac, and decreases in the balances backing commercial mortgage-backed securities, the overall amount of mortgage debt outstanding backed by commercial/multifamily properties remained relatively unchanged,” he said.

Commercial banks continue to hold the largest share of commercial/multifamily mortgages, $1.53 trillion, or 45% of the total, according to the Federal Reserve Bank statistics. CMBS, CDO and other ABS issuers are the second largest holders of commercial/multifamily mortgages, holding $709 billion, or 21% of the total. Life insurance companies hold $310 billion, or 9% of the total, and savings institutions hold $190 billion, or 6%.

The GSEs, agency-backed mortgage pools and GSE-backed mortgage pools, including Fannie Mae, Freddie Mac and Ginnie Mae, hold $197 billion in multifamily loans that support the mortgage-backed securities they issued and an additional $162 billion in “whole” loans in their own portfolios–representing a total share of 10% of outstanding commercial/multifamily mortgages. The Federal Reserve Flow of Funds data summarizes the holding of loans or, if the loans are securitized, the form of the security. MBA was unable to return a call in time for publication.

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