Morningstar DBRS Confirms Credit Ratings on All Classes of MF1 2022-FL9 LLC

DBRS, Inc. (Morningstar DBRS) confirmed its credit ratings on all the classes of notes issued by MF1 2022-FL9 LLC as follows:

-- Class A Notes at AAA (sf)
-- Class A-S Notes at AAA (sf)
-- Class B Notes at AA (low) (sf)
-- Class C Notes at A (low) (sf)
-- Class D Notes at BBB (sf)
-- Class E Notes at BBB (low) (sf)
-- Class F Notes at BB (high) (sf)
-- Class F-E Notes at BB (high) (sf)
-- Class F-X Notes at BB (high) (sf)
-- Class G Notes at BB (low) (sf)
-- Class G-E Notes at BB (low) (sf)
-- Class G-X Notes at BB (low) (sf)
-- Class H Notes at B (low) (sf)
-- Class H-E Notes at B (low) (sf)
-- Class H-X Notes at B (low) (sf)

The trends on the Class F, F-E, F-X, G, G-E, G-X, H, H-E, and H-X Notes are Negative. The trends on the remaining classes are Stable.

The credit rating confirmations reflect the overall stable outlook for the ultimate resolution for most of the pool's underlying loans, with just more than $285.0 million in unrated and below investment grade credit rated classes in the $1.75 billion structure. The transaction also benefits from its full concentration of loan secured by multifamily property types, which have historically performed better than other property types in times of economic disruption and/or property value declines. The individual borrowers in the subject pool are generally progressing as expected with their respective business plans; there are some instances where credit risks have increased because of stalls in the stated business plans, and in those cases, the Morningstar DBRS analysis was stressed to reflect those characteristics.

The Negative trends maintained for the lowest three principal classes in the capital stack (and the corresponding interest-only (IO)classes) reflect Morningstar DBRS' ongoing concerns with select loans in the pool, which are showing increased credit risks. Morningstar DBRS notes many borrowers continue to face execution risk with their respective business plans because of a combination of factors, including decreased property values, increased construction costs, slower rent growth, and the exposure to a higher interest rate environment for the floating-rate loans, which collateralize the transaction. As a result of lagging business plans and loan exit strategies, the borrowers of 18 loans, representing 49.3% of the current trust balance, have received loan modifications and/or forbearances. Terms for the modifications vary from loan to loan, but common terms include interest deferrals via a hard and soft pay structure and a waiver of interest rate cap agreement requirements. Forbearance agreements have been executed to facilitate further modification discussions between the lender and borrowers. Additionally, the transaction faces a heighted maturity risk as 40 loans, representing 87.9% of the current trust balance, have maturity dates in the past or are scheduled to mature within the next 12 months. While all of those loans have built-in extension options, Morningstar DBRS notes most loans will not qualify to exercise the related options based on current collateral performance and will likely need to be modified.

In conjunction with this press release, Morningstar DBRS has published a Surveillance Performance Update report with an in-depth analysis and credit metrics for the transaction and with business plan updates on select loans. To access this report, please click on the link under Related Documents below or contact us at info-DBRS@morningstar.com.

The initial collateral consisted of 45 loans secured by 61 transitional multifamily and one manufactured housing community (MHC) properties, totaling $1.74 billion. The transaction had a maximum funded balance of $1.80 billion and was formerly a managed vehicle as the 24-month reinvestment period expired with the May 2024 Payment Date. As of the June 2025 remittance, the pool comprises 46 loans secured by 97 properties with a cumulative trust balance of $1.75 billion, reflecting a collateral reduction of 3.0% since issuance. Since the previous Morningstar DBRS credit rating action in September 2024, one $10.4 million loan has been repaid in full.

All but three loans are secured by traditional multifamily property types in apartment complexes and apartment buildings. The remaining three loans are secured by MHC properties (7.5% of the current trust balance). The pool is primarily secured by properties in suburban markets, with 30 loans, representing 61.2% of the pool, assigned a Morningstar DBRS Market Rank of 3, 4, or 5. An additional 11 loans, representing 33.8% of the pool, are secured by properties in urban markets, with a Morningstar DBRS Market Rank of 6, 7, or 8. The remaining loans are backed by properties with a Morningstar DBRS Market Rank of 1 or 2, denoting tertiary markets. These property-type and market-type concentrations remain generally in line with both the pool composition and the August 2024 credit rating action.

Leverage across the pool has remained consistent as of June 2025 reporting when compared with issuance metrics, as the current weighted-average (WA), as-is, appraised loan-to-value ratio (LTV) is 75.8%, with a current WA stabilized LTV of 63.4%. In comparison, these figures were 71.8% and 63.3%, respectively, at issuance. Morningstar DBRS recognizes that select property values may be inflated as the majority of the individual property appraisals were completed in 2022 and may not fully reflect the effects of increased interest rates and/or widening capitalization (cap) rates in the current environment. Morningstar DBRS applied upward LTV adjustments in the analysis for 28 loans, representing 23.2% of the current trust balance, generally reflective of higher cap rate assumptions as compared with the implied cap rates based on the appraisals.

As of the June 2025 reporting, five loans, representing 7.4% of the pool balance, are in special servicing. The Highline Lofts (Prospectus ID#31; 1.3% of the current trust balance) loan is secured by a 112-unit Class B, multifamily property in Aurora, Colorado. The loan transferred to special servicing in May 2024 following a maturity default and, according to the June 2025 remittance, is more than 12 months delinquent and a receiver is in place, with the servicer working to foreclose. As of February 2025, the property was 77.7% occupied, with more than 90.0% of the $2.0 million capital improvement plan to upgrade 111 unit interiors and property common areas and exteriors completed. At loan closing, the property was valued at $29.8 million ($266,000 per unit). In the analysis for this review, Morningstar DBRS identified comparable sales transactions near the subject since the start of 2023, which sold for a median price per unit of approximately $210,000 per unit, and an average price per unit of approximately $230,000, suggesting a sale price achieved in the near to moderate term for the subject would likely be less than the issuance as-is appraised value. Given these dynamics, Morningstar DBRS assumed a stressed value of $26.2 million in the liquidation scenario considered for this review, resulting in a loan level loss severity of approximately 10%.

There are 36 loans on the servicer's watchlist, representing 81.5 of the current trust balance, which have primarily been flagged for lower than-breakeven debt service coverage ratios and upcoming maturity dates. The largest loan on the servicer's watchlist and in the trust, LA Lofts Portfolio (Prospectus ID #1; 13.0% of current trust balance), is secured by a portfolio of five properties totaling 1,037 units in downtown Los Angeles. The loan has been on the servicer's watchlist for multiple years for low net cash flow, which was most recently reported as $1.3 million as of YE2024. The original borrower's business plan was to use up to $18.5 million of loan future funding to complete a significant capital expenditure (capex) plan focused on unit renovations, property exterior and amenity upgrades, and the correction of deferred maintenance. For more information on this loan and the analytical approach for this review, please see the Surveillance Performance Update report, referenced above.

Through June 2025, the lender had advanced cumulative loan future funding of $263.6 million to 36 of the outstanding individual borrowers. The largest advance, $62.5 million, was made to the borrower of The 600 (Prospectus ID#54; 2.9% of the current trust balance), which is secured by a 30-story, 404-unit multifamily tower in Birmingham, Alabama. The borrower's business plan is focused on the conversion of the former office property to multifamily use and as of the Q1 2025 update from the collateral manager, the capex project was nearly complete and borrower has begun leasing up the property. There is no more future funding available to the borrower for that loan, which matured in July 2024 and was modified to allow the borrower to exercise the first 12-month extension option. Terms of the modification included reduction in the floating interest rate spread to 4.50% from 5.90%. The borrower was required to purchase an interest rate cap agreement with a 5.25% strike rate and deposit $5.4 million into a shortfall reserve with the obligation to replenish the reserve to $3.0 million if it falls below $1.0 million.

An additional $84.7 million of loan future funding allocated to 29 of the outstanding individual borrowers remains available. The largest portion of available funding ($10.8 million) is allocated to the borrower of The Reserve at Brandon loan (Prospectus ID#2; 5.2% of the current trust balance), which is secured by a 982-unit multifamily complex in Brandon, Florida. The funds are available to fund the borrower's significant capex program originally budgeted at $27.6 million, with $15.4 million allocated for unit upgrades and the remaining funds allocated for property wide improvements. According to the Q1 2025 collateral manager update, the borrower had requested loan advances of $22.5 million and had completed 556 unit upgrades as well as all planned property exterior improvements. Renovated and leased units reportedly achieved an average rental rate of $1,472 per unit, representing a 32% premium over the average rental rate for similar nonrenovated units. The loan was modified in July 2024 to allow the borrower to exercise the first 12-month maturity extension option to April 2025. As part of the terms of the modification, the borrower made a $7.5 million principal curtailment and deposited $2.5 million into a shortfall reserve to receive a hard pay/soft pay interest structure on the loan. The hard pay rate through October 2025 is 5.35% with any additional amounts deferrable and due at loan maturity. An additional $8.5 million of deferred interest, which accrued when the borrower received a forbearance when the loan matured in April 2024, was also categorized as deferred interest and is also due at loan maturity.

Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025), https://dbrs.morningstar.com/research/454196.

Classes F-X, G-X and H-X are IO certificates that reference a single rated tranche or multiple rated tranches. The IO rating mirrors the lowest-rated applicable reference obligation tranche adjusted upward by one notch if senior in the waterfall.

All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is North American CMBS Surveillance Methodology (28 February 2025) https://dbrs.morningstar.com/research/448963.

Other methodologies referenced in this transaction are listed at the end of this press release.

The credit ratings were initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for these credit rating actions.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with these credit rating actions.

These are solicited credit ratings.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings

Please see the 17g-7 disclosure report and/or the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

As applicable, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS' outlooks and credit ratings are monitored.

DBRS, Inc.
22 West Washington Street
Chicago, IL 60602 USA
Tel. +1 312 332-3429

The credit rating methodologies used in the analysis of this transaction can be found at:
https://dbrs.morningstar.com/about/methodologies.

-- North American Commercial Mortgage Servicer Rankings (August 23, 2024),
https://dbrs.morningstar.com/research/438283
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (September 19, 2024),
https://dbrs.morningstar.com/research/439702
-- Legal Criteria for U.S. Structured Finance (December 3, 2024),
https://dbrs.morningstar.com/research/444064
-- Interest Rate Stresses for U.S. Structured Finance Transactions (March 27, 2025),
https://dbrs.morningstar.com/research/450750
-- North American CMBS Multi-Borrower Rating Methodology/ North American CMBS Insight Model v 1.3.0.0 (April 9, 2025), https://dbrs.morningstar.com/research/451739

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.