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Life Company Loans for Commercial Real Estate
Life insurance company loans typically have the lowest rates and longest amortizations of any kind of commercial real estate loan. Life company loans are non-recourse, start at $2 million, and are typically available for high-quality apartment, industrial, retail, or office properties located in top areas.
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
Comparatively low LTV allowance
Non-recourse loans
Difficult to get loans on non-premium real estate
Often requires hard cash invested by the owner
Competitive interest rates
Long loan terms
Very large loan size allowed
Early rate locks often available
Commercial Life Company Loan Cons
Commercial Life Company Loan Pros
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