Comprehensive List of CRE Capital Sources - 12/10/2020
I see a lot of posts about financing options for investment properties and thought it would be beneficial to compile the main sources at play. Here is a semi-comprehensive list of capital sources for commercial properties. I may start posting updates once a month to reflect the current market. I'll do my best to answer questions on specific capital sources and where they are in the market today. Source - Commercial Mortgage Broker. 


**Fannie/Freddie**
**SBL**
- Only deals in Multifamily (4+ units). 
- $750k - $7.5MM (top markets). 
- $750k - $6.5MM (Small/standard markets). 
- 80% Maximum LTV. 
- Borrower experience required. 
- 5, 7, 10, 12 year fixed term products. 
- 30-year amortization. 
- Interest Only Available. 
- Yield Maintenance prepayment penalty +40~ bps for step down prepayment penalty. - Typically has lowest rates for multifamily lending. 2.75-400% rate, deal by deal


**Fannie/Freddie Conventional**
- Only deals in Multifamily (4+ units)
- $7.5MM+ (top markets)
- $6.5MM+ (small/standard markets)
- 80% maximum LTV
- Borrower experience required
- 5, 7, 10, 12 year fixed term products
- 30-year amortization
- Interest Only Available
- Yield Maintenance prepayment penalty
- +40~ bps for step down prepayment penalty
- Typically has lowest rates for multifamily lending
- 2.75-400% rate, deal by deal

 
**Bank**
- Multifamily, Office, Retail, NNN, Industrial, Medical, Self-Storage, Hospitality (shut down)
- 75% Maximum LTV
- 5, 7, or 10-year term (most will quote 5+5)
- Typically, 25-year amortization (sometimes 30)
- Step Down Prepayment Penalty
- Rates from 3.50 – 4.50%
- Recourse/limited recourse
- Usually has Bank origination fee of 0.25 – 1%


**Credit Union**
- Multifamily, Office, Retail, NNN, Industrial, Medical, Self-Storage, Hospitality (shut down)
- 75% Maximum LTV
- 5, 7, or 10-year term (most will quote 5+5)
- Typically, 25-year amortization (sometimes 30)
- Usually has no prepay
- Recourse/limited recourse/non-recourse
- Membership requirements (borrower must live/work/pray in lending geography)
- Usually has CU origination fee of 0.25 – 1%


**CMBS**
- Multifamily, Office, Retail, Industrial, NNN (pulling back on ST retail properties), Self-Storage 
- Max 80% LTV
- $3MM - $150MM+ loan amount
- 5, 7, or 10-year term
- 30-year amortization
- Full term IO available
- Rates from 3.25-4.25%
- Yield maintenance prepay
- Non-recourse w/bad boy carveouts
- High closing costs ($35k+)


**Life Insurance**
- Multifamily, Office, Retail, Industrial, NNN, Self-Storage 
- Max 70% LTV (maybe 75%), lower leverage lender
- 5, 7, 10, 15, 20-year fixed term
- 25/30 year amortization
- Rates from 2.75-4.25%
- Recourse/non-recourse
- YM prepay or Step Down
- Lower closing costs


**Bridge/Debt Funds**
- Most Property types (value add + construction)
- Max 80% LTC + 100% CAPEX
- 12-36-month term
- Interest only
- Typically 1-3% origination, depending on riskiness of project
- 1% exit fee
- Minimal DSCR requirements
- Quick closing
[{"id": "gfb16g1", "text": "I have no clue how to format this effectively. Sorry for the wall of text", "replies": [{"id": "gfbb8kr", "text": "Formatted well enough in my opinion!", "replies": [], "depth": 2}], "depth": 1}, {"id": "gfb23jh", "text": "Thanks for the list.  I do a lot of work with Life Insurance Companies and they can fix a rate longer than 10 years if you want.  I actually quoted a 20/20 earlier this year.", "replies": [{"id": "gfb3ngx", "text": "Ah good catch! Just updated the list to reflect this. If you don't mind me asking, what property type was the 20/20 quote?", "replies": [{"id": "gfb4396", "text": "It was a single tenant retail NNN with a good borrower.", "replies": [], "depth": 3}], "depth": 2}, {"id": "gp9srgr", "text": "Can you elaborate a bit more? I\u2019m interested in finding lending for a NNN property and didn\u2019t know life insurance companies were an option. Any recommendations on where to get pre-qualified?", "replies": [{"id": "gpawe14", "text": "No problem.  We have a relationship with a Life Co, Boston Mutual Life Insurance Company, that is very interested in NNN property deals.  Not all of them like them, but there are certain few that does.  To try and get qualified usually starts with working with a mortgage broker, because most of them require some sort of servicing agreement and cannot work with borrowers direct.  If it is something that is of interest to you, you can reach out to me directly and I will give you my work email.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gfb9b5c", "text": "Good stuff, it would be nice if we could get more productive posts like this on sub (myself included)", "replies": [], "depth": 1}, {"id": "gfbqdh8", "text": "Don\u2019t forgot about FHA/HUD loans. The best rates", "replies": [{"id": "gfbrrta", "text": "At the cost of 6-8 months closing timeline and $2,500/year audits!", "replies": [{"id": "gff28sx", "text": "i've never done a market rate hud loan so maybe thats much better (doubt it) but holy christ working with hud financing on project based s8/236 is a nightmare.  Its like you just pay out the ass for compliance and random things and everyone you deal with has no common sense and every decision is made based on a random paragraph from a 500 page guide book.  \n\nWe had about 95% equity (over 100% if you include hud held reserves) and a short term left (like 18 months) on one and they about bankrupted us by not letting us pay it off early.  \n\nI understand prepayment penalties and all but just \"nope, btw your reac is due and you need a new market rent appraisal and how is your audit going?\" sucks.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gfby8xx", "text": "Rates on bridge/debt funds are pretty high right? What have you seen?", "replies": [{"id": "gfc2efk", "text": "8%-12%+ in my experience for bridge. Closed last month after getting a few quotes.", "replies": [{"id": "gfhfh7k", "text": "Thanks. What did you end up getting? If you don\u2019t mind I\u2019d like to hear asset type, ARV etc", "replies": [{"id": "gin772k", "text": "We\u2019re quoting bridge (we have two distinct capital sources one is insurance money / the other our own debt fund) at 4.95-7.95 rates right now. The other thing that many people don\u2019t fully appreciate is the I/O and non-recourse aspect - now suddenly 7% doesn\u2019t sound so bad.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gfc34rp", "text": "I'd also add Private Money &amp; Hard Money Loans:\n\n* Most property types\n* 75-90% PP + 100% Rehab\n* Max 60%-90% LTV\n* Rates depend on experience and credit score\n* Typically 8% - 15% interest + 1-5 points\n* Minimal documents\n* Asset-based loans for investors, do not rely on personal credit/finances\n* Quick closing", "replies": [], "depth": 1}, {"id": "gfc72jm", "text": "If you\u2019re looking to start acquiring multifamily properties but don\u2019t have significant NW metrics, what is the easiest way to qualify for a loan?", "replies": [{"id": "gfe8vd2", "text": "Hard Money would be your best shot as they have less regulations on NW", "replies": [], "depth": 2}, {"id": "gfeao90", "text": "I actually have a good debt fund for no NW requirements if interested. PM me if you want", "replies": [{"id": "gfjms9j", "text": "Sent!", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "gfcbs06", "text": "I\u2019m curious if anyone has had any success getting 100% LTC for a BTS if they\u2019ve got a signed lease in hand from a tenant. Industrial use.", "replies": [{"id": "gfckbjs", "text": "Our firm actually does 100% LTC BTS lmao. PM me", "replies": [], "depth": 2}], "depth": 1}, {"id": "gfcmwfk", "text": "Outstanding! Thank you!", "replies": [], "depth": 1}, {"id": "gfh8cgn", "text": "Very helpful - thank you.", "replies": [], "depth": 1}, {"id": "gflb7l1", "text": "Would also like to add, a lot of the institutional debt funds play in the 5-7 year game as well. Typically they'll play in the senior/mezz space. For ex Lending on 85% LTV and selling off 65% LTV to another institutional source (most likely a lifeco) at a Lower interest rate. They'll maintain the 65-85% LTV while boosting their effective returns this way, while the borrower is still seeing their quoted rate.", "replies": [], "depth": 1}, {"id": "gh1ts6r", "text": "As a correspondent intermediary, I approve this message.", "replies": [], "depth": 1}, {"id": "gp9sh35", "text": "So for a NNN commercial property with high cap rate, whats the best approach for less than 10% down?", "replies": [{"id": "gqcoo86", "text": "Not a possibility. 30% (maybe 25%) maximum down for NNN, best case scenario", "replies": [], "depth": 2}], "depth": 1}, {"id": "hkrjdpp", "text": "This is a great post. \n\nShould update to reflect 2021/2022 terms. OP you wanna take a stab?\n\nIndustrial is seeing 80% LTV and lower DSCR. \nNNN leasing terms. Maybe add that lenders typically want lease term to match debt. Unlikely to get a 7-10 year with expiring leases. Esp single tenant\u2026", "replies": [], "depth": 1}]