Life Company Loans for Commercial Real Estate

Commercial Real Estate Life Company Loans

For large commercial real estate projects, many business owners and investors are looking to life company loans as an alternative to GSE financing. A life company loan is provided by a life insurance company - or a group of life insurance companies - and is typically offered to borrowers looking to finance apartment, industrial, retail, or office properties.

However, hospitality properties are also sometimes financed, depending on individual circumstances. Since life insurance companies are constantly looking to mitigate risk, it's often easier to find a life company loan for a newer, high-quality property.

Sample Life Company Terms

While life company loans can vary, we've provided a snapshot of the typical loan terms below:

• Size: $2 million+

• Term: 10- to 25-year terms

• Interest Rate: Varies (fixed rate)

• Amortization: 25 years

• Maximum LTV: 65% to 75%

• Minimum DSCR: 1.25x

• Minimum Debt Yield: 8% to 10%

• Recourse: Non-recourse, standard carve-outs apply

• Replacement Reserves: Typically required

• Prepayment: Penalties assessed, regular or soft step-downs possible

• Fees: Vary

Commercial Life Company Loan Cons

• Comparatively low LTV allowance

• Non-recourse loans

• Difficult to get loans on non-premium real estate

• Often requires hard cash invested by the owner

Commercial Life Company Loan Pros

• Competitive interest rates

• Long loan terms

• Very large loan size allowed

• Early rate locks often available

Apply for a Commercial Life Company Loan Today