Life Insurance Commercial Real Estate Loans
Life insurance companies often underwrite commercial real estate loans on
their own or in collaboration with other providers. These loans have two objectives:
generating returns for the life insurance companies and minimizing risk exposure through
strategic diversification. To achieve this risk mitigation objective, all aspects of these loans are
deeply influenced. If you are looking for a long-term and cost-effective commercial real estate
loan, a life insurance company could be an ideal financing solution for your project.
Life Insurance Loan Terms
Eligible Properties: | Multifamily, Office, Warehouse/Industrial, Mixed Use, Retail, Medical/Healthcare, Self Storage, Hotel/Motel |
Loan amount range: | Minimum $3,000,000 |
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 |
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