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Multifamily Mortgage Lending: A Comparison of the U.S. and Canada


  • Cynthia Holmes

    () (Florida State University, College of Business, Tallahassee FL, 32306-1110)

  • Michael LaCour-Little

    () (California State University, Fullerton, Department of Finance, 2600 E. Nutwood Avenue, 1060-26, Fullerton, CA 92833)


We combine loan data from distinct sources to compare and contrast multifamily mortgage lending in Canada and the U.S. After a general comparison of the multifamily housing markets in the two countries, we focus on loan pricing and non-price contract terms in the two environments. We find longer loan terms in the U.S. compared to Canada and attribute this to the greater liquidity available from a more established secondary mortgage market. We also find that while nominal rates are higher in Canada, mortgage spreads are actually lower, a result likely due to contract features that raise the cost of default for borrowers and restrict prepayments". In terms of loan performance, we found greater prepayment risk in U.S. mortgages and greater default risk in Canadian mortgages, although findings regarding default are limited by small sample size.

Suggested Citation

  • Cynthia Holmes & Michael LaCour-Little, 2007. "Multifamily Mortgage Lending: A Comparison of the U.S. and Canada," International Real Estate Review, Asian Real Estate Society, vol. 10(1), pages 151-170.
  • Handle: RePEc:ire:issued:v:10:n:01:2007:p:151-170

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    References listed on IDEAS

    1. Richard K. Green & Susan M. Wachter, 2005. "The American Mortgage in Historical and International Context," Journal of Economic Perspectives, American Economic Association, vol. 19(4), pages 93-114, Fall.
    2. Marsha J. Courchane & Judith A. Giles, 2002. "A Comparison of U.S. and Canadian Residential Mortgage Markets," Econometrics Working Papers 0201, Department of Economics, University of Victoria.
    3. Brent W. Ambrose & Michael LaCour-Little & Anthony B. Sanders, 2004. "The Effect of Conforming Loan Status on Mortgage Yield Spreads: A Loan Level Analysis," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 32(4), pages 541-569, December.
    4. Emily Norman Zietz, 2003. "Multifamily Housing: A Review of Theory and Evidence," Journal of Real Estate Research, American Real Estate Society, vol. 25(2), pages 185-244.
    5. Qiang Fu & Michael LaCour-Little & Kerry D. Vandell, 2003. "Commercial Mortgage Prepayments Under Heterogeneous Prepayment Penalty Structures," Journal of Real Estate Research, American Real Estate Society, vol. 25(3), pages 245-476.
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    More about this item


    mortgage; multifamily; international;

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services


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