Understanding a CMBS Conduit Loan
Is a CMBS Conduit Loan Right for Your Investment properties?
Howell Investment Finance is often asked, “What is a CMBS conduit loan and would it be right for me and my commercial property?” First, what is a CMBS conduit loan? The CMBS (Commercial Mortgage-Backed Security) loan is a fixed-rate, first mortgage that is secured by stabilized commercial real estate properties. Once closed, CMBS conduit loans are pooled together by Wall Street investment banks and sold as securities to investors.
Second, properties eligible for a CMBS conduit loan are multifamily, offices, hotels, retail, self-storage, manufactured home parks, and industrial. CMBS loans can range from $2 million to $100 million. You can even save on closing costs by mixing the property types into one larger loan, for example by combining multifamily with office buildings or other property types.
Benefits of CMBS Conduit Loans
- All CMBS conduit loans are non-recourse, which means there are no personal guarantees, no tax returns, and no global finances.
- CMBS conduit loans allow for unrestricted cash-out on refinances when the new CMBS conduit loan amount is greater than the loan balance being paid off. This cash can be used as you see fit, no restrictions.
- Competitive interest rates are fixed for 5, 7, or 10 years.
- 75-80% LTV with 25-30 amortizations.
- 45-60 days from application to closing.
- Loans are assumable and interest-only payments are possible.
With lenders in Chicago, Minneapolis, New York City, Washington, D.C. and Dallas, Howell Investment Finance can help you find the right CMBS Conduit loan for refinancing or purchasing an investment property, They specialize in financing with Fannie Mae, Freddie Mac, HUD, and CMBS loans. Based in Ames, IA, they offer favorable interest rates and loan terms to investors across Iowa. With more than 25 years of experience, Howell Investment Finance can provide invaluable advice and guidance as you navigate the loan application process. Call (515) 233-8228 to schedule an appointment or visit them online to view the different types of mortgages available.