Commercial Loan Rates Today

(Check out our article about where commercial interest rates are headed in 2023)

 

Commercial Loan Rates & Guidelines for 15 Top Loan Programs

Commercial Mortgage-Backed Security (CMBS) Loans

Rate:  6.25% – 7.25%

Get a low 10-year fixed at a lower rate than what most banks have for their five-year fixed loan programs

These non-recourse loans have competitive 5- and 10-year fixed rates and can do

a blanket loan to include multiple properties. Lenders close with their own funds and

then sell the loans in securitized pools as mortgage-backed security bonds.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student housing, mobile home parks, self-storage, industrial, hotels, office, and retail.

Types of Loans: Permanent loans only

 

Program Guidelines and Requirements

▪ Loan size: $2,000,000–50,000,000

▪ LTV: 75% with cash out

▪ 25–30 year amortization

▪ Nonrecourse

▪ 5- or 10-year fixed rates/term

▪ Tax returns not required

▪ No global or debt to income ratio

▪ No ground-up construction

▪ Loan fee: 1%

▪ Primary and secondary markets preferred

▪ 675 minimum credit score

▪ Minimum net worth negotiable

▪ Post-closing cash negotiable

1.25–1.35 minimum DSCR

▪ Yield maintenance or defeasance prepayment penalty

▪ Occupancy required: 85%, or market occupancy

▪ Assumable with a 1% fee

▪ Interest-only available

▪ Rate lock at loan approval

▪ Refundable rate-lock deposit require

For More on CMBS Loans go here

Community Banks

Rate:  5.50% – 6.25%

If you don’t have a high net worth or experience but have solid income, this is where you will qualify.

 

These are small banks that make loans in their own backyard. They have low requirements for net worth and liquidity, but require good income and credit. Most are not fond of cash-out refinancing.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student housing, mobile home parks, self-storage, industrial, hotels, office, retail, business owner-occupied, and land

Types of Loans: Permanent, construction, rehabilitation, mini-perm, and credit lines.

 

Program Guidelines and Requirements

▪ Loan size: $150,000––$6,000,000

▪ LTV: 75%; 65% with cash out

▪ 25-year amortization

▪ Recourse

▪ 3–5 year fixed rates

▪ 10-year term

▪ Tax returns required

▪ Global ratio and debt to income ratio

▪ Loan fee: 1.00%

▪ Lend in local market

▪ 680 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.25–1.40 minimum DSCR

▪ Declining prepayment penalty

▪ Occupancy required: 85%, or market occupancy

▪ Assumable: no

▪ Interest-only: no

▪ Rate lock at loan approval or documents

▪ Refundable rate-lock deposit: no

Credit Unions

Rate: 5.55% – 6.25%

If you have strong personal income and don’t want a prepayment penalty, this is the place to shop 

 

Credit unions make loans to members who live nearby. They are nonprofit and can be very competitive on rates and loan fees. They are known for not having prepayment penalties.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student housing, mobile home parks, self-storage, industrial, hotels, office, retail, business owner-occupied, and land

Types of Loans: Permanent, rehabilitation, construction, and credit lines

 

Program Guidelines and Requirements

▪ Loan size: $75,000–15,000,000

▪ LTV: 75%; 65% with cash out

▪ 25-year amortization

▪ Recourse

▪ 3–10 year fixed rates

▪ 10-year term

▪ Tax returns: required

▪ Global ratio: required

▪ Loan fee: 1.00%

▪ Most lend in local markets

▪ Borrower required to join the credit union

▪ 675 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.25 minimum DSCR

▪ Usually no prepayment penalty

▪ Occupancy required: 85%

▪ Assumable: no

▪ Interest-only: no

▪ Rate lock at loan application

▪ Refundable rate-lock deposit: no

Crowdfunding Loans

Rate: 5.95% - 7.95%

If you only have 15%  to put down, this can work here. But be careful. These lenders will want a preferred return and most of the ownership.

 

These loans can fund quickly in three or four weeks and are easier to qualify for than bank loans. Crowdfunding platforms are lenders that allow investors to invest in larger properties by pooling their money with other investors. Investors choose the properties they want to invest in, so be wary; sometimes they change their mind prior to closing and the crowdfunder has to find a replacement.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student housing, self-storage, and industrial

Types of Loans: Short-term, bridge/rehabilitation, and construction

 

Program Guidelines and Requirements

▪ Loan size: $250,000–12,000,000

▪ LTV: 75–80%

▪ Up to 80% cost of construction

▪ Interest-only

▪ Recourse

▪ 1–3 year term

▪ Tax returns: required

▪ Loan fee: 2–3%

▪ 640 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.00–1.25 minimum DSCR

▪ 6–12 months prepayment penalty

▪ Assumable: no

▪ Primary, secondary, and small markets

▪ Experience a plus

Fannie Mae Multifamily Loans

Rate: 5.25% – 6.05%

These low-rate nonrecourse loans can be fixed for up to 30 years

 

Fannie Mae, short for Federal National Mortgage Association, is a government-sponsored enterprise (GSE) and has some of the lowest rates and best terms around for apartment properties of five units or more. Rates can be fixed from 5 to 30 years. Fannie Mae does not actually originate loans, but is a publicly-traded corporation that guarantees and securitizes them to be sold as mortgage-backed security bonds. Authorized lenders close with their own funds and then sell the loans to Fannie Mae.

 

Acceptable Property Types: Multifamily, senior housing, student housing, and mobile home parks

Types of Loans: Permanent loans only

 

Program Guidelines and Requirements

▪ Loan size: $1,000,000—unlimited

▪ LTV: 80%, 75% with cash out

▪ 30-year amortization

▪ Non-recourse available

▪ 5–30 year fixed rates/term

▪ No tax returns

▪ No global or debt to income ratio

▪ No ground-up construction

▪ Loan fee: 0.50–1.00%

▪ 680 minimum credit score

▪ Lend in any size market

▪ Minimum net worth equal to loan amount

▪ Post-closing cash: 12 months’ loan payments

▪ 1.25 minimum DSCR

▪ 35% commercial space allowed

▪ Yield maintenance prepayment penalty

▪ 90% occupancy required for 90 days

▪ Affordable housing programs

▪ Assumable with a 1.00% fee

▪ Interest-only available

▪ Rate lock at loan approval

▪ Refundable rate-lock deposit required

For more on Fannie Mae Loans go here

 

Freddie Mac Multifamily Loans

Rate: 6.18 – 6.95%

5 – 10 Year Non-recourse, low rates, and full-term interest only

 

Freddie Mac is a GSE that securitizes loans from their approved lenders. These are put into mortgage pools and sold to investors as mortgage-backed security bonds on Wall Street.

 

Acceptable Property Types: Multifamily, senior housing, and student housing

Types of Loans: Permanent loans only

 

Program Guidelines and Requirements

▪ Loan size: $1,000,000–50,000,000

▪ LTV: 75% with cash out

▪ 30-year amortization

▪ Non-recourse available

▪ 5- or 10-year fixed rates

▪ 5–20 year term

▪ No tax returns

▪ No global or debt-to-income ratio

▪ No ground-up construction

▪ Loan fee: 0.50–1.00%

▪ Higher rates for smaller markets

▪ 660 minimum credit score

▪ Minimum net worth equal to loan amount

▪ Post-closing cash: 12 months’ loan payments

▪ 1.20–1.25 minimum DSCR

▪ 35% commercial space allowed

▪ Yield maintenance or declining prepayment penalty

▪ 90% occupancy required for 90 days

▪ Affordable housing programs

▪ Assumable with a 1% fee

▪ Interest-only available

▪ Rate lock at application

For more on Freddie Mac Loans go here: 

Hard Money Bridge and Construction Loans

Rate:  8.95% - 12.00%

These are expensive temporary loans, but do not require great credit and net worth; they are fast and for many projects they pencil.

 

Poor credit and low net worth are usually acceptable. These lenders can close very quickly. It’s much better to use a hard money lender that gets their funding from a warehouse line of credit than from small private investors who can change their minds prior to closing.

 

Acceptable Property Types: Multifamily, mixed-use, senior housing, student housing, mobile home parks, self-storage, industrial, hotels, office, retail, business owner-occupied, and land

Types of Loans: Construction, rehabilitation/bridge

 

Program Guidelines and Requirements

▪ Loan size: $750,000–25,000,000

▪ LTV: 65–75%

▪ Up to 75% of the cost of construction

▪ Interest-only

▪ Recourse and non-recourse

▪ 1–2 year term

▪ Tax returns: not required

▪ Global ratio: no

▪ No minimum credit score

▪ Net worth requirement: minimal

▪ Post-closing cash: minimal

▪ 6–12 months prepayment penalty

▪ Post-closing cash: negotiable

▪ Debt service ratio: 1.00 or less

▪ Assumable: no

 

HUD/FHA Multifamily and Healthcare

Rate: 2.93% - 3.28%

 

Being able to fix a low rate for 35 years makes this government loan program very attractive

 

The US Department of Housing and Urban Development (HUD) guarantees loans made from its approved lenders that are sold as the highest-rated mortgage-backed security bonds on Wall Street.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, senior healthcare, and hospitals

Types of Loans: Permanent loans for refinance, acquisition, and rehabilitation; also construction rollover to permanent loans.

 

Permanent Loan Guidelines and Requirements

▪ Loan size: $2,000,000–100,000,000 plus

▪ LTV: 85%; 80% with cash out

▪ 35-year amortization

▪ Non-recourse

▪ 35-year fixed rates

▪ 35-year term

▪ No tax returns

▪ No global or debt to income ratio

▪ 25% commercial space of total sf

▪ Loan fee: 1.5%–

▪ HUD fee: 0.30%

▪ Mortgage insurance: 0.25–1.00%

▪ Prior similar property ownership experience needed

▪ Primary, secondary, and small markets okay

▪ Good credit required with no specific score

▪ No minimum net worth requirement

▪ Post-closing cash required not specified

▪ 1.176 minimum DSCR for market rents

▪ 1.15 minimum DSCR for affordable housing

▪ Declining prepayment penalty

▪ 90% occupancy required for 90 days

▪ Affordable housing programs

▪ Assumable with a 0.50% fee

▪ Interest-only not available

▪ Rate lock at loan approval with a 1/2-point refundable deposit

▪ Minimum six months for loan approval

Construction and Major Rehabilitation Guidelines and Requirements

▪ Loan size: $5,000,000–100,000,000 plus

▪ LTV: 85% of cost

▪ 40-year amortization

▪ Non-recourse

▪ 40-year fixed rates

▪ 40-year term

▪ No tax returns

▪ No global or debt to income ratio

▪ 25% commercial space of total sf

▪ Loan fee: 2.00%

▪ HUD fee: 0.70%

Mortgage insurance: 0.25–0.70%

▪ Prior development experience required

▪ Primary, secondary, and small markets okay

▪ Good credit required with no specific score

▪ No minimum net worth requirement

▪ Post-closing cash required not specified

▪ 1.176 minimum DSCR for market rents

▪ 1.15 minimum DSCR for affordable housing

▪ Declining prepayment penalty

▪ Affordable housing programs

▪ Assumable with a 0.50% fee

▪ Interest-only not available

▪ Rate lock at loan approval

▪ Minimum six months for loan approval

▪ Refundable rate-lock deposit required with a 1/2-point refundable deposit

For more on HUD/FHA Financing go here

 

Large Commercial Banks

Rate: 2.95% - 3.56%

 

If you are a high-net-worth experienced borrower, have large deposits with the bank, and are competing, they will break the bank to give you the lowest rate

 

These are banks such as Chase, Bank of America, Bank of the Ozarks, and Wells Fargo. They can lend very large amounts in larger cities nationally. They have higher net worth, liquidity, and experience requirements than regional banks. Because they have so much of their own money to lend they can be very competitive on rates and fees.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student housing, mobile home parks, self-storage, industrial, hotels, office, retail, business owner-occupied, and land

Types of Loans: Permanent, construction, rehabilitation, mini-perm, and credit lines

 

Program Guidelines and Requirements

▪ Loan size: $250,000–75,000,000

▪ LTV: 75%; 70% with cash out

▪ 25- or 30-year amortization

▪ Recourse

▪ 3-, 5-, 7-, 10-year fixed rates

▪ 10-year term

▪ Tax returns: required

▪ Global ratio: required

▪ Loan fee: 1%

▪ Primary, secondary, and small markets

▪ 700 minimum credit score

▪ Minimum net worth: equal to loan size

▪ Post-closing cash: 10–15% of loan amount

▪ 1.25–1.35 minimum DSCR

▪ Yield maintenance or declining prepayment penalty

▪ Occupancy required: 85%, or market occupancy

▪ Assumable: no

▪ Interest-only: no

▪ Rate lock at loan approval

▪ Refundable rate-lock deposit: no

 

Life Companies

Rates:  3.10% - 3.75%

 

They prefer low LTVs, strong borrowers, and large cities. But have the very lowest long-term fixed rates.

 

These large insurance companies have capital divisions that lend on commercial real estate. They prefer lending at 65% LTV or less, and have very low rates that can be locked for up to 25 years. They prefer large cities and financially strong experienced borrowers. Life companies lend their own money, with many doing CMBS executions.

 

Acceptable Property Types: Multifamily, senior housing, student housing, mixed-use, office, retail, industrial, and hotel

Types of Loans: Permanent, bridge, and construction loans

 

Program Guidelines and Requirements

▪ Loan size: $10,000,000–150,000,000 plus

▪ LTV: 70%

▪ 25–30 year amortization

▪ Non-recourse

▪ 5–25 year fixed rates

▪ 5–25 year term

▪ Tax returns required

▪ No global or debt-to-income ratio

▪ Strong borrower experience required

▪ Loan fee: 1%

▪ Primary and secondary markets

▪ 720 minimum credit score

▪ Minimum net worth equal to 1.5 times loan amount

▪ Post-closing cash: 20% of loan amount

▪ 1.25 minimum DSCR

▪ Yield maintenance prepayment penalty

▪ 90% occupancy required

▪ Assumable with a 1% fee

▪ Interest-only available

▪ Rate lock at loan approval

▪ Refundable rate-lock deposit required

 

National Bank Capital Divisions

Rates: 2.95% - 3.45%

 

Loan size is not a problem here—and they have the lowest construction loan rates for strong experienced developers.

 

These subsidiaries of large banks such as JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup have the best loan programs for stronger, experienced borrowers. Along with lending their own money, many can do Fannie Mae, HUD, and CMBS lending.

 

Acceptable Property Types: Multifamily, mixed-use, senior housing, student housing, mobile home parks, self-storage, industrial, office, and retail

Types of Loans: Permanent, construction, and rehabilitation

 

Program Guidelines and Requirements

▪ Loan size: $10,000,000–250,000,000

▪ LTV: 70%

▪ 25- or 30-year amortization

▪ Recourse or non-recourse considered

▪ 5-, 7-, 10-year fixed rates

▪ 10-year term

▪ Tax returns required

▪ Global ratio and debt-to-income ratio: required

▪ Loan fee: 1%

▪ Primary markets preferred

▪ 720 minimum credit score

▪ Minimum net worth of twice the loan’s size

▪ Post-closing cash: 25% of loan size

▪ 1.20–1.25 minimum DSCR

▪ Yield maintenance prepayment penalty

▪ Occupancy required: 90%

▪ Assumable: no

▪ Interest-only: no

▪ Rate lock at loan approval or documents

▪ Refundable rate-lock deposit: no

 

 Bad Credit Secondary Market Commercial Lenders

Rates: 6.50% - 8.95%

 

Yes, rates are high, but if you have bad credit you can get the project funded here and work on building a higher credit score.

 

If your credit is less than perfect, these loan programs have much better rates and terms than hard money lenders. Commercial mortgage brokers specialize in these loans.

 

Acceptable Property Types: Multifamily, mixed use, senior housing, student housing, self-storage, and industrial, hotels, office, and retail

Types of Loans: Permanent and bridge loans

 

Program Guidelines and Requirements

▪ Loan size: $500,000–6,000,000

▪ LTV: 70% with cash out

▪ 25- or 30-year amortization

▪ Non-recourse

▪ 2–5 year term

▪ Tax returns: not required

▪ Loan fee: 1–2%

▪ Rates based on credit score

▪ 540 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.25 minimum DSCR

▪ Declining prepayment penalty

▪ Assumable: no

▪ Primary and secondary markets

For more on Bad/Poor Credit Multifamily Loans go here

 

Private Debt Funds

Rates: 6.95 – 8.25

 

If you are getting turned down at banks and have a strong deal, this is the place to get your loan. They have simple make-sense underwriting.

 

These are private lenders that are regulated by the SEC. They pool money from investors and lend it at moderate to moderately high rates on commercial real estate. Loans are made more on the strength of the property than on the borrower. Commercial mortgage brokers specialize in these loans.

 

Acceptable Property Types: Multifamily, mixed-use, senior housing, student housing, self-storage, industrial, hotels, office, and retail

Types of Loans: Construction, bridge/rehabilitation

 

Program Guidelines and Requirements

▪ Loan size: $3,000,000–75,000,000

▪ LTV: 75% with cash out

▪ Up to 80% cost of construction

▪ Interest-only

▪ Non-recourse

▪ 1–4 year term

▪ Tax returns: required

▪ Loan fee: 2–3%

▪ 640 minimum credit score

▪ Minimum net worth: negotiable

▪ Post-closing cash: negotiable

▪ 1.00–1.20 minimum DSCR

▪ 6–12 months prepayment penalty

▪ Assumable: no

▪ Primary and secondary markets

For more on private debt fund bridge loans go here

 

Regional Bank Income Property Divisions

Rates:  3.20% - 3.85%

 

You can get a low 3–10-year fixed-rate and lock the rate immediately at application.

 

These lenders are capital divisions of banks and lend in the larger cities in the states they are located in; some lend in neighboring states as well. They generally have lower rates than community banks, can fix a rate for up to 10 years, and can lend larger amounts. Many sell their loans on the secondary market. They have higher net worth and cash requirements than community banks, but some of the lowest rates.

 

Acceptable Property Types: Multifamily, mixed-use, industrial, office, hospitality, and retail

Types of Loans: Permanent loans only

 

Program Guidelines and Requirements

▪ Loan size: $1,000,000–15,000,000

▪ LTV: 75% with cash out

▪ 30-year amortization multifamily

▪ 25-year amortization commercial

▪ Recourse

▪ 3-, 5-, 7-, 10-year fixed rates

▪ 25- or 30-year term

▪ Tax returns: required

▪ Global ratio: required

▪ Primary and secondary markets preferred

▪ Loan fee: 1%

▪ 680 minimum credit score

▪ Minimum net worth equal to loan amount

▪ Post-closing cash: 12 months’ loan payments

▪ 1.20–1.25 minimum DSCR

▪ Declining prepayment penalty

▪ Occupancy required: 90%

▪ Assumable: yes, with a 1% fee

▪ Interest-only: no

▪ Rate lock at application

▪ Refundable rate-lock deposit: no

 

SBA for Hospitality, Self-Storage, and Owner-User

Rates: 3.56% - 5.75%

 

Borrow up to 85% for self-storage and hotels.

 

Although the SBA (Small Business Administration) will go up to 90%, plan on 85% unless you can get a seller-carry second mortgage. These loans are easier to qualify for than most commercial loans.

 

Acceptable Property Types: Self-storage, hotels, and owner-occupied business properties

Types of Loans: Permanent and construction loans

 

Program Guidelines and Requirements

▪ Loan size: $125,000–12,000,000

▪ LTV: 85–90%

▪ 90% loan to cost for construction

▪ 25-year amortization for real estate

▪ Recourse

▪ Floating rates or 10-year fixed with SBA 504

▪ Tax returns not required

▪ No global or debt to income ratio

▪ No ground-up construction

▪ SBA guarantee fee: 3.00–3.50%

▪ Experience preferred

▪ 675 minimum credit score

▪ Minimum net worth negotiable

▪ Post-closing cash negotiable

▪ 1.10–1.20 minimum DSCR

▪ Declining prepayment penalty

▪ Occupancy required: negotiable

▪ Assumable: yes

▪ Interest-only: no

▪ Rate lock at loan approval

▪ Lends nationally in any size market