CMBS Commercial Loans

CMBS Commercial Loans

CMBS loans can be used for the purchase or refinance for Commercial Real Estate properties, including Hotels, Industrial, Office, Multi-family, Medical, Mixed-Use, Retail, and Self-StorageLike all the other loans we offer at CLD, this type of loan is secured by a first-position mortgage on a commercial real estate property and is particularly popular among commercial real estate investors seeking non-recourse loans. Although conduit lenders have reverted back more prudent credit decisions that mitigate risk of default, CMBS loans have more flexible underwriting guidelines than conventional or agency loans. This means that Commercial Real Estate Investors that cannot meet the more stringent c...

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CMBS Loan Application Process

Getting an Application If you are in agreement regarding the rate that was quoted to you by the CMBS Lender, the next step is for them to issue you an application. Typically, in order to be issued an application, the following additional items are needed: 3 years historical operating statements on the property Annual budget for the current year Copy of the franchise agreement and any proposed PIP (if hospitality) Purchase price (if purchase) Cost basis (i. e. purchase price + capital improvements) and loan balance (if refinance) Requested loan amount, including schedule of sources and uses Keep in mind that some of these items may be reviewed during the underwriting period rather than ...

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What is a CMBS Loan?

A Commercial Mortgage-Backed Securities (CMBS or conduit) mortgage is a fixed-rate, non-recourse loan product that uses flexible underwriting standards and larger commercial real estate properties as collateral. Several of these mortgages are pooled together, securitized into bonds, and sold to investors. However, this doesn’t affect the borrower; the loan is serviced similarly to any other loan product. The financial institution that offers the loans to borrowers will initially fund the loans with its own money at closing, then pool the loans together and securitize them (i. e. turn them into bonds). The rating agencies (i. e. Moody’s, Fitch, Kroll, S&P, DBRS, and Morningstar) then ...

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