Commercial Real Estate Financing - Commercial Mortgages

Description

Commercial real estate (CRE) is income-producing property that is used solely for business (rather than residential) purposes, such as retail malls, shopping centers, office buildings and apartment complexes, and hotels.  Financing  – including the acquisition, development, and construction of these  properties – is typically accomplished through commercial real estate loans: mortgages secured by liens on the commercial property.

Loan-to-Value Ratios

Commercial loan LTVs, generally fall into the 65% to 80%  range. While some loans may be made at higher LTVs, they are less  common. The specific LTV often depends on the loan category. For example, a maximum LTV of 65% may be allowed for raw land,  while an LTV of up to 80% might be acceptable for a multifamily  construction or other types of commercial developments.