Commercial Mortgages
Financing options and strategies for commercial real estate, from multifamily to office and industrial.
Overview
Commercial mortgages are loans used to purchase or refinance commercial real estate, including multifamily properties, office buildings, retail centers, industrial facilities, and mixed-use developments. Commercial loan terms, rates, and qualification requirements differ significantly from residential mortgages.
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Frequently Asked Questions
What is the difference between a commercial and residential mortgage?
Commercial mortgages are for income-producing properties and typically have shorter terms (5-10 years), higher rates, and require larger down payments (25-35%). Residential mortgages are for 1-4 unit properties used as primary residences or investments, with longer terms (15-30 years) and lower rates.
What DSCR is needed for a commercial loan?
Most commercial lenders require a minimum DSCR of 1.25, meaning the property’s net operating income must be at least 25% higher than the annual debt service. Stronger properties may qualify with lower ratios, while riskier properties may require higher ratios.
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