Question 1

What is the minimum credit score required for a commercial mortgage?

Accepted Answer

Most commercial mortgage programs require a minimum credit score of 660-680. However, some programs like DSCR loans may have more flexible requirements, focusing more on property performance than personal credit. Higher credit scores typically result in better rates and terms.

Question 2

How much down payment do I need for a commercial property?

Accepted Answer

Down payment requirements typically range from 20-35% depending on the property type, loan program, and borrower qualifications. Multifamily properties often have lower requirements (20-25%), while specialized properties may require 30-35% down.

Question 3

What documents are needed for a commercial loan application?

Accepted Answer

Common documentation includes: property financials (rent rolls, operating statements), purchase agreement, personal financial statement, tax returns (2-3 years), bank statements, entity documents (if applicable), and property appraisal. DSCR loans may require less personal documentation.

Question 4

How long does the commercial loan process take?

Accepted Answer

Timeline varies by loan type: Bridge loans can close in 7-14 days, conventional loans typically take 30-45 days, and SBA loans may take 60-90 days. Having complete documentation ready can significantly speed up the process.

Question 5

Can I get a commercial loan for a property I don't occupy?

Accepted Answer

Yes, most commercial loans are specifically designed for investment properties. DSCR loans are particularly popular for non-owner-occupied properties as they qualify based on property income rather than personal income.

Question 6

What is the difference between recourse and non-recourse loans?

Accepted Answer

Recourse loans allow the lender to pursue the borrower's personal assets if the property doesn't cover the debt. Non-recourse loans limit the lender's recovery to the property itself. Non-recourse loans typically have stricter requirements and higher rates.

Question 7

Are commercial mortgage rates higher than residential rates?

Accepted Answer

Yes, commercial mortgage rates are typically 0.5-2% higher than residential rates due to increased risk and complexity. However, rates vary significantly based on property type, LTV, DSCR, and borrower qualifications.

Question 8

Can I refinance my commercial property?

Accepted Answer

Yes, refinancing is common in commercial real estate. Reasons include lowering your rate, accessing equity, changing loan terms, or consolidating debt. Use our refinance calculator to estimate potential savings.

Question 9

What is a prepayment penalty?

Accepted Answer

Many commercial loans include prepayment penalties that charge a fee for paying off the loan early. Common structures include yield maintenance, defeasance, or step-down penalties. Understanding these terms is crucial before signing.

Question 10

Do you offer loans for first-time commercial investors?

Accepted Answer

Yes, we work with first-time commercial investors. While experience can help secure better terms, we have programs designed for newer investors. Strong property fundamentals and adequate down payment can offset limited experience.

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