Commercial Real Estate Loans
Compare financing for multifamily properties, individual commercial sites and standalone buildings using the property’s repayment story.
Multifamily photograph by SevenStorm JUHASZIMRUS. Resized. Source · Pexels License. Illustrative photograph.
Multifamily and commercial property paths
Cederholm Mortgage Advisors offers commercial real estate loan options for multifamily and multiunit properties, single-site or single-unit commercial properties and standalone buildings. The property use, occupancy, ownership and repayment source determine the appropriate review.
Multifamily
Review rent rolls, leases, operating expenses and property performance. Start your financing plan →
Standalone property
Compare an owner-occupied site with an investor-leased building. Start your financing plan →
Structure and exit
Understand term, amortization, recourse and prepayment provisions. Start your financing plan →
Smart home financing starts with strategy
Owner-occupied or income-producing
A business occupying its own building and an investor leasing a property can need different financing. Expect a review of business or property financials, leases, rent rolls, operating costs, value and borrower capacity. One-to-four-unit rentals may fit residential investment financing; larger apartment properties generally require a multifamily or commercial review.
Compare term, leverage and exit
Review amortization and maturity separately: the loan may end with a balloon balance before it is fully repaid. Compare required equity, reserves, recourse, guarantees, prepayment terms and extension options. Build in appraisal, environmental and other due-diligence costs where required.
Commercial loan sizing: look beyond one ratio
We compare financing for multifamily, standalone buildings and individual commercial sites—including a single building or unit where the property and program fit. Owner-occupied business real estate and investor-owned leased property may follow different underwriting paths.
Commercial analysis uses several measures together. Balance-sheet strength, collateral and debt yield matter, but they do not generally replace debt-service review. A lender may size a loan to the most restrictive limit, not the strongest ratio.
| Metric | Calculation | How to use it |
|---|---|---|
| LTV — Loan-to-value | Loan amount ÷ underwritten property value | Tests leverage against the collateral. Purchase price and accepted value can differ. |
| LTC — Loan-to-cost | Loan amount ÷ eligible total project cost | Useful for acquisition and value-add projects. Verify whether fees, reserves and improvements count as eligible costs. |
| Debt yield | Annual NOI ÷ loan amount | Shows operating income relative to debt independently of the interest rate and amortization. |
| Cap rate | Annual NOI ÷ price or value | An income-based valuation measure before debt service; it is not your total investment return. |
| Commercial DSCR | Underwritten net cash flow ÷ annual debt service | Commonly used with the other ratios. Unlike a residential rental gross-rent/PITIA ratio, this uses an underwritten operating-income measure. |
A property example: three different views of leverage
Illustrative acquisition: price $2,000,000, annual NOI $160,000 and requested loan $1,400,000. LTV is 70%, debt yield is 11.4% and the purchase cap rate is 8%. If annual debt service is $120,000 and NOI is used as the simplified cash-flow numerator, DSCR is 1.33.
If underwritten NOI falls to $130,000, debt yield becomes 9.3% and that simplified DSCR falls to 1.08, although LTV remains 70% if the value stays unchanged. In real underwriting, lower income may also change the accepted property value. This is why lease quality, vacancy and expenses matter alongside equity.
Ranges such as 65–80% LTV, 75–85% LTC or 8–10% debt yield are comparison points—not universal requirements or a loan quote. A particular loan may use tighter limits, a different expense treatment or additional reserves. We will review the actual term sheet against your property.
Match the structure to your hold period
- Amortization versus loan term
- A loan can calculate payments over 25 or 30 years while maturing much sooner. The unpaid principal may become a balloon at maturity. Compare both dates with your sale or refinance plan.
- Interest-only period
- May lower initial debt service while leaving principal unchanged. Test the payment after the interest-only period ends, not just the first-year payment.
- Recourse versus non-recourse
- Recourse can create liability beyond the property. Non-recourse commonly includes exceptions for specified acts and other obligations. Review guarantees, environmental indemnities and carve-outs with your legal advisor before signing.
- Bridge versus permanent financing
- Short-term financing can support a transition or improvement plan; stabilized property financing may have a longer horizon. A planned refinance requires its own approval and a viable property at that time.
- Rate risk and early payoff
- Ask about variable-rate indexes, floors and required rate caps. Yield maintenance, defeasance or another prepayment provision may make early repayment costly. Model these costs before assuming you can sell or refinance cheaply.
Build a sponsor and property package that answers the real questions
- Property: address, use, unit count, price, current debt, rent roll, leases and operating statements.
- Business plan: renovation budget, occupancy targets, tenant improvements, leasing costs, timeline and repayment strategy.
- Sponsor: ownership structure, relevant experience, financial statement, post-closing liquidity and other guarantees or debt.
- Reports: budget for valuation, environmental review and a property condition assessment. Additional engineering or capital-needs work may be required.
- Reserves: identify tax, insurance, replacement, interest and other escrows, plus funds remaining after closing.
A 9–10% liquidity requirement or net worth equal to the loan amount may appear in a particular program; neither is a rule for every commercial loan. Experience expectations also depend on the asset and execution. We will outline the actual sponsor requirements once the property and structure are defined.
Tell our team about the acquisition or refinance: price, renovation cost, number of units or building size, current income and your experience with similar assets. We can compare the financing choices and identify the information needed to move forward.
Bring a useful financing package
Start with the property address, intended use, purchase contract or current debt, ownership information and available financial statements. For leased property, include leases, a rent roll and operating history. Confirm zoning, access, insurance and property-specific costs with the appropriate professionals.
Explore Mortgage Calculators
Compare purchase, refinance and affordability scenarios, then let our team help turn the estimate into a financing plan.
Questions worth asking
Potentially. Intended use, title, property condition, income or business occupancy and the program determine the path. We offer commercial financing conversations for individual sites as well as multifamily properties; unit count alone does not decide eligibility.
Not automatically. Commercial programs often evaluate cash flow, equity, debt yield and sponsor strength together. We will review whether the requested leverage and repayment plan fit the property rather than assume one strong measure offsets the others.
Amortization sets the payment schedule; maturity sets when the remaining debt becomes due. If the term ends first, a balance can remain. Our team will compare the maturity with your intended hold and refinance plan.
No. Carve-outs, guarantees and indemnities can create obligations even with a non-recourse structure. Review the actual documents and legal implications, and ask our team to identify those terms early.
Include origination, legal and third-party reports, escrows, replacements, tenant improvements and any rate hedge or early-payoff costs. We will review the full financing budget against the property business plan.
Match the financing to the property and its use
Commercial real estate financing can include multifamily properties, individual commercial sites and standalone buildings. Start with whether the property is owner-occupied by a business or leased to tenants. Property use, condition, income, leases, borrower experience and ownership structure shape the review. A single commercial unit can involve different questions from an entire apartment building.
Small residential rentals and commercial multifamily financing are not interchangeable. A one-to-four-unit residential investment property may fit a residential loan path; larger multifamily and other commercial assets generally require a different conversation. Mixed-use properties also need a specific review.
Compare more than the quoted rate
- Review the loan term separately from amortization. A balloon balance can remain when the loan matures.
- Ask about debt-service coverage, occupancy, reserves and the income or expense adjustments used in underwriting.
- Compare recourse or personal guarantees, prepayment terms and any extension options.
- Budget for appraisal, environmental or other property reports and closing expenses.
- Discuss lease rollover, repair needs and the cash available if occupancy falls.
For a first conversation, gather the property address, price or current debt, rent roll, leases, operating statements, ownership information and your intended use. We can help identify financing paths for the scenario; availability depends on the property and current lender terms.
Learn about commercial real estate lending categories and multifamily financing structures. A public program description does not establish that a particular loan is available for your property.
What our clients say
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Plan your next move
Bring your goals and a property address if you have one. Paul Cederholm, mortgage expert and real estate financing strategist, can help you compare the financing choices and plan your next step.
Ready to begin? Start your loan application. Prefer a direct conversation? Call 303-931-6798.
*Information, scenarios, and calculations are for educational and illustrative purposes only—not a loan offer, a commitment to lend, a rate quote or an approval. Programs, costs and qualification requirements depend on the borrower, property, selected lender and current guidelines. Examples are not guaranteed results. Our team can review the details for your situation.