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Life Insurance Loan Highlights
Eligible Properties:
- Multifamily
- Office
- Warehouse/Industrial
- Mixed Use
- Retail
- Medical/Healthcare
- Self Storage
- Hotel/Motel
Loan amount range:
Minimum $1,000,000
Interest Rate:
Fixed rates vary.
Loan Term:
5 to 30 year terms available
Amortization:
Up to 30 years
Maximum LTV:
70%
Minimum DSCR
1.25 – 1.35x
Minimum Debt Yield:
8-10%
Recourse:
Can be non-recourse, limited-recourse or full recourse.
Prepayment:
Typical yield maintenance fee, Break Funding or a Declining “step-down” premium
Advantages of Life Insurance CRE Loans
Life insurance commercial real estate loans have several advantages that make them attractive for properties that qualify:
- Fixed Interest Rates: Competitive rates that don’t change for the 15 – 30 year terms of these loans.
- Non-Recourse And Assumable: Providing individuals with protection and allowing the loan to transfer.
- No Limit: Access to millions, as there isn’t an official upper limit to the amount borrowed.
Disadvantages of Life Insurance CRE Loans
Life insurance commercial real estate loans also have disadvantages that render them unable or undesirable when financing some properties:
- Grade A: Often only available for newer properties in good repair, and not for properties outside of Class A investment grade.
- LTV & DSCR: Some of the most conservative LTV and DSCR requirements for borrowers to meet.
- Prepayment Penalties: Frequently have prepayment penalties and aren’t offered for shorter terms that would bypass these penalties.