Commercial Mortgage Loans – New Low Rates Mean Opportunity for Qualified Borrowers

The current credit environment remains very challenging for commercial real estate property owners and investors. The state of the economy and the commercial mortgage backed securities (CMBS) market has prompted lenders to tighten standards and be more selective in deciding which deals they will underwrite. But in the midst of this credit crunch, opportunity has emerged for good credit borrowers with quality properties to finance.

 

Interest rates on commercial mortgages are lower than they have been in a very long time. Loan rates are set based on established interest indexes such as the 10 year US Treasury Bond yield or the 30 day LIBOR. World-wide demand for secure fixed income investments has driven bond rates down, consequently rates lenders charge for their mortgage products are also lower.

 

Lending parameters have been narrowed and fewer buildings and borrowers can qualify for the most attractive loan programs but for those that do qualify, today’s rates offer a unique opportunity to lock in very favorable financing for as-many-as 10 years into the future.

 

For instance, our firm is now able to offer 5, 7 & 10 year fixed rates starting at 5.5% to our best credit clients who are buying or refinancing stabilized income producing commercial property. (Rates are subject to change with market and other factors)

Often, loans are amortized over 25 years to keep payments low.

 

Property types such-as warehouses, retail centers, office buildings, self-storage facilities all qualify for low rate loans. And, thanks to unprecedented support from the Government’s two big lenders, Fannie Mae and Freddie Mac, there is absolutely no lack of liquidity in the multi-family (apartment) sector. Fannie and Freddie increased their apartment lending by more than 65% (year-over-year) and there are hundreds of billions of dollars available to finance apartment buildings.

 

To be approved borrowers and deal sponsors will have to show that they are sound financially and will need credit scores above 640. Likewise, buildings will need to be well maintained and produce sufficient positive cash flow. Loans will be fully underwritten and will require full documentation. In short; the best commercial mortgage loans are reserved for the best borrowers.

 

A poor economy and a weak credit market make for a challenging business environment. However, property owners and commercial real estate investors who have maintained a good credit rating and sound finances will find opportunities (like historically low rates) to match the challenges.

 

 MasterPlan Capital LLC – Commercial Mortgage Loans – Simple, 1 Page Application – Quick Answers – Professional Service – Apartments, Office, Retail, Hospitality, Warehouses, Self-Storage – Purchase & Refinance – Institutionally Funded or Private Lending

 

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