Non-Recourse CMBS Loans for Commerical Properties

If you’re looking for flexible, non-recourse, fixed-rate financing for your multifamily or commercial property, a CMBS loan could be the perfect fit. Fortunately, the CMBS financing experts are CMBSLoans.us are ready and waiting to help you get the financing you deserve.

CMBS loans, also referred to as conduit loans, are available for nearly all income-producing property types, including multifamily apartments, industrial properties, senior living, retail, office, and hotels, as well as unique property types like parking lots, marinas, or even recreational facilities.

CMBS loans are generally issued in either 5, 7, or 10-year fixed-rate terms. Financing is non-recourse with standard bad-boy carve-outs for fraud and intentional bankruptcy, which means that, unless you break the rules, the borrower cannot attempt to repossess your personal property to pay back the loan.

Terms and Requirements for CMBS Loans

Unlike bank loans or life insurance company loans for commercial properties, or Fannie Mae, Freddie Mac, and HUD multifamily financing for apartment properties, CMBS loans have relatively lenient borrower requirements.

CMBS terms and requirements include:

LTV: Up 75%-80%
DSCR: Minimum DSCR of 1.25x, more for riskier property types.
Net Worth: Borrower net worth of 25% of the entire loan amount.
Liquidity: Liquidity of 10% of the entire loan amount.
Credit Score: A credit score of 600+

In some situations, CMBS lenders may overlook borrower credit or legal issues if the property is performing exceptionally well. These requirements are in stark contrast to the loan types mentioned above, which often require a borrower to have a net worth of 100% of the loan amount, 25% liquidity, and credit scores of 660-680+.

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Don’t Pay An Expensive CMBS Loan Broker

In the world of CMBS, some brokers and advisors charge exorbitant fees, and those fees come out of your pocket, not the lenders.

Our expert advisory partners take only a small fee, typically 0.75% or less, and only get charged if a loan closes. Our advisors are not lenders and are not tied to any one shop. This means they will get different lenders bidding on the same loan with one goal; to get you the lowest rates, highest leverage, and best terms available.

Increase Leverage With Mezzanine Debt and Preferred Equity

If your CMBS lender is only willing to lend up to 65% on your asset, but you want or need additional leverage, this can sometimes be achieved with an additional mezzanine loan or preferred equity via an intercreditor agreement, sometimes referred to as a subordination agreement. This can be particularly beneficial if you are purchasing a property with existing CMBS financing and assuming a loan from the previous property owner. Often, this can boost your overall LTV up to 75-80%.