Credit Market Spillover Effects to the Real Economy: Evidence from Rental Housing Evictions

We present novel evidence showing how the financing choice of landlords impacts eviction decisions in rental markets. Since multifamily loans rely on timely rental payments, strict underwriting factors can increase the chances that landlords withstand income shocks. Lender provided relief may further create leeway for landlords to work with tenants who default on rent. Using data on U.S. evictions and commercial multifamily mortgages, we document a negative relation between evictions and debt financing by the government-sponsored enterprises, which impose strict underwriting criteria but offer borrowers relief during unprecedented income shocks. We also quantify eviction risks induced by the COVID-19 pandemic for select cities.

Keywords: Evictions, Rental Housing, Multifamily Mortgages, GSE, COVID-19

JEL Classification: G28, R30, I38

Suggested Citation: Suggested Citation

Ambrose, Brent W. and An, Xudong and Lopez, Luis A., Credit Market Spillover Effects to the Real Economy: Evidence from Rental Housing Evictions (August 11, 2022). Available at SSRN: https://ssrn.com/abstract=3745974 or http://dx.doi.org/10.2139/ssrn.3745974