Commercial mortgage loans to buy or refinance multifamily, mixed-use, retail, office, and industrial property. See how underwriting works and pre-qualify.
A commercial mortgage loan is long-term financing secured by commercial or income-producing real estate. It is used to purchase or refinance property such as apartment buildings, mixed-use buildings, retail centers, office buildings, and industrial or warehouse space.
FundLogic arranges commercial mortgages for investors and business owners nationwide as part of our real estate financing programs. Whether you are buying your first apartment building or refinancing a stabilized retail property, the goal is a structure that fits the property's income and your long-term plan.
Apartment buildings with five or more units are generally financed with commercial loans rather than residential mortgages. Underwriting focuses on the rent roll, occupancy, operating expenses, and the stability of the property's income. Smaller 2–4 unit rentals are often a better fit for a DSCR loan.
Mixed-use properties combine residential and commercial space, such as apartments above ground-floor retail. Lenders look at how much of the income comes from each use, lease terms on the commercial space, and whether the owner occupies part of the building. These details can affect which loan programs are available.
Other property types may be considered case by case.
If your own business will occupy most of the property, SBA 504 or 7(a) financing may offer longer terms and a lower down payment than a conventional commercial mortgage.
Commercial mortgages can be used to:
Commercial lenders focus primarily on the property's ability to support the debt. Key measures include:
The lender will also order third-party reports, which commonly include an appraisal, an environmental review, and a property condition assessment.
If your business occupies the building, lenders view the loan partly as a business loan and will review the company's financials alongside the property. If you lease the building to others, the decision rests mainly on the rent roll and leases. Knowing which category your property falls into helps narrow the programs available.
Commercial mortgage terms vary widely by lender, property, and borrower. Across the industry, common features include:
Long-term commercial financing generally costs less than short-term bridge or hard money financing, but it takes longer to close and requires a stabilized property with documented income. If the property has significant vacancy or needs renovation, a bridge loan is often the first step, followed by a commercial mortgage once the property is stabilized.
A residential mortgage finances a home with one to four units and is underwritten mainly on the borrower's personal income. A commercial mortgage finances income-producing or business property, including apartment buildings with five or more units, and is underwritten mainly on the property's net operating income, value, and the sponsor's experience.
It depends on the property type, its income, the program, and your profile. Commercial loans generally require more equity than owner-occupied home loans. Owner-occupied businesses may qualify for SBA programs with lower down payments. We will outline the equity requirement for your property during pre-qualification.
Yes. Commercial real estate is commonly owned and financed through an LLC or other entity. Lenders typically require the principals to provide financial information and, depending on the loan, a personal guarantee. Non-recourse structures may be available for certain properties and loan sizes.
Requirements vary by property type and lender, but commercial lenders commonly look for a debt service coverage ratio comfortably above 1.0, meaning the property's net operating income exceeds its annual debt payments with a cushion. Higher-risk property types usually require a higher ratio.
Commercial mortgages usually take longer than residential loans because they require an appraisal, environmental and property condition reports, and a detailed review of leases and financials. Timing depends on the property and how quickly documents are provided. Starting with a complete rent roll and operating statements helps.
Yes. Refinancing ahead of a maturing balloon payment is one of the most common reasons owners seek a new commercial mortgage. Start early so there is time for third-party reports and underwriting. If the property is not yet stabilized, a bridge loan can buy time until it qualifies for permanent financing.
Send us the property details, rent roll, and your goals, and we will explain which commercial mortgage structure fits. Apply to pre-qualify — pre-qualification will not affect your credit. You can also compare all real estate financing programs.
