What are the requirements for a commercial real estate loan?
Commercial real estate loans require 660+ credit scores, 20-35% down payment, DSCR of 1.20x+, 2-3 years of tax returns, and property appraisal. Loan sizing uses the lower of LTV (65-80%), DSCR, and debt yield metrics.
Key Takeaways
- Commercial real estate loans require minimum credit scores of 660-680 for most lenders, with 700+ for best terms
- Standard documentation includes 2-3 years of tax returns, personal financial statement, property financials, and business plan
- LTV limits range from 65-80% depending on property type, with multifamily generally getting the highest leverage
- Loan sizing is driven by the lower of LTV, DSCR, and debt yield calculations
- Environmental Phase I and property appraisal are required for virtually all commercial loan applications
660-680
Minimum credit score required by most commercial real estate lenders
Source: Federal Reserve Bank Survey
45-60 days
Average commercial real estate loan closing timeline from application
Source: Mortgage Bankers Association
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