Non-accrual is the status a lender applies when full collection of a loan is doubtful — generally when principal or interest is 90+ days past due, or repayment in full is not expected. On non-accrual, the lender stops recognizing interest income and reverses previously accrued interest.
A non-accrual loan earns nothing while it sits, so it is a direct drag on income — a key reason lenders resolve non-accrual credits rather than carry them.
Why credits like this reach a workout desk: bank noncurrent commercial real-estate loans have risen while reserve coverage slips at community banks (FDIC Quarterly Banking Profile), and roughly $957 billion of commercial and multifamily mortgage debt was scheduled to mature in 2025 — against a total market of about $4.8–5.0 trillion, ~38% of it held by banks and thrifts (Mortgage Bankers Association). See the CRE distress statistics hub for the full figures and sources.
Primary sources: FDIC Quarterly Banking Profile, Mortgage Bankers Association, and interagency (FDIC / OCC / Federal Reserve) guidance on CRE loan accommodations and workouts. Figures are directional and updated periodically; confirm the latest release before relying on a specific number.
Generally when it is 90+ days past due, or when full collection of principal and interest is otherwise doubtful, unless the loan is well secured and in the process of collection.
Previously accrued but uncollected interest is typically reversed against income when the loan moves to non-accrual.
No — it is priced to its collateral and recovery path. Non-accrual credits are routinely sold for cash. See how buyers price a CRE loan.