Why Are Orlando Commercial Property Owners Refinancing in 2026?
Orlando's commercial property owners are actively evaluating refinancing opportunities as the lending market offers pathways to improve loan terms, extract accumulated equity, and restructure debt to align with evolving investment strategies. The combination of Orlando's strong property value appreciation, driven by sustained population growth and economic diversification, and a stabilizing interest rate environment has created a window where refinancing can deliver meaningful financial benefits across property types.
The motivation for refinancing varies across Orlando's diverse commercial property landscape. Owners of multifamily properties acquired during the low-rate period of 2020 to 2022 face upcoming loan maturities and are refinancing into new fixed-rate terms to secure predictable payments. Value-add investors who purchased and renovated properties using bridge financing are converting to permanent loans at significantly lower rates. Portfolio owners are consolidating multiple loans into single, more efficient structures. And many Orlando property owners are accessing the equity their properties have accumulated through cash-out refinancing to fund additional acquisitions.
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Orlando's market fundamentals support strong refinancing outcomes because lenders view the metro favorably across all major property types. The approximately 2.8 million metro population, growing by roughly 1,500 new residents per week, ensures sustained tenant demand. The tourism economy anchored by Walt Disney World, Universal Orlando Resort, and the new Universal Epic Universe provides a unique economic floor. Lake Nona Medical City's continued expansion drives healthcare and technology employment. And Florida's absence of a state income tax continues to attract both individuals and businesses from higher-cost states.
For property owners carrying commercial loans in Orlando, refinancing represents an opportunity to optimize the capital structure, reduce borrowing costs, and position properties for the next phase of their investment strategy.
What Commercial Refinance Programs Are Available in Orlando?
Orlando's commercial refinancing market offers a comprehensive range of programs, each designed for specific property types, borrower profiles, and financial objectives. Selecting the right refinance program is essential for achieving your specific goals.
Agency Refinancing (Fannie Mae and Freddie Mac) offers the most competitive terms for Orlando multifamily properties with five or more units. Rates typically range from 5.25% to 6.50% with 30 to 35 year terms, up to 80% LTV for rate-and-term refinances and 75% for cash-out, and non-recourse structures. Agency refinancing represents the gold standard exit strategy for multifamily bridge loan borrowers who have completed renovations and stabilized their Orlando apartment properties.
Conventional Bank Refinancing serves all Orlando commercial property types including office, retail, industrial, and mixed-use. Rates range from 5.75% to 7.75% with terms of 5 to 25 years and up to 75% LTV. Regional banks with Florida expertise offer relationship-based pricing that can be particularly competitive for established borrowers with multiple banking products.
CMBS Refinancing provides non-recourse terms for larger Orlando commercial properties, typically $2 million and above. Rates range from 5.75% to 7.25% with 5 to 10 year terms and up to 75% LTV. CMBS refinancing is particularly attractive for investors seeking to eliminate personal guarantees while locking in fixed-rate terms.
SBA 504 Refinancing offers exceptional terms for owner-occupants refinancing existing commercial property debt. The program provides up to 90% LTV, below-market fixed rates on the CDC portion, and 25-year terms. Orlando business owners can refinance existing high-rate commercial mortgages, pay off bridge loans, and even extract equity for eligible business purposes through SBA 504 refinancing.
DSCR Refinancing allows Orlando property investors to refinance based solely on the property's rental income without providing personal income documentation. Rates range from 6.0% to 9.0% with up to 80% LTV for rate-and-term and 75% for cash-out. This program is ideal for self-employed investors, portfolio builders, and out-of-state owners who prefer streamlined qualification. Use a DSCR calculator to evaluate your property's refinancing potential.
HUD/FHA Refinancing provides the lowest rates available for Orlando multifamily properties, starting as low as 5.64% with fully amortizing 35-year terms and up to 85% LTV. The FHA 223(f) program finances acquisitions and refinancing of stabilized apartment properties with non-recourse structures. Processing times of 90 to 120 days make this program best suited for larger assets.
Cash-Out Refinancing is available through most programs, allowing Orlando property owners to access equity accumulated through appreciation, renovations, and debt paydown. Cash-out LTV limits are typically 5% to 10% lower than rate-and-term refinance limits. The extracted equity can be used for any purpose, including funding down payments on additional acquisitions.
When Is the Right Time to Refinance an Orlando Commercial Property?
Timing a commercial property refinance in Orlando involves evaluating multiple factors including current market rates, your existing loan terms, property performance, and investment strategy. Several scenarios commonly trigger refinancing decisions.
Loan maturity approaching is the most common refinancing trigger. Orlando property owners with loans maturing within 6 to 12 months should begin the refinancing process early to ensure adequate time for underwriting, appraisal, and closing. Starting the process at least 6 months before maturity provides flexibility to shop multiple lenders and negotiate the best available terms.
Rate improvement opportunity exists when current market rates fall meaningfully below your existing loan rate. A general guideline suggests refinancing is worthwhile when the new rate saves at least 0.50% to 0.75% after accounting for closing costs, prepayment penalties on the existing loan, and the remaining term. For larger Orlando properties, even smaller rate improvements can generate substantial savings.
Bridge loan conversion is a strategic refinancing event for Orlando investors who have completed value-add projects and achieved stabilization. Converting from a bridge loan at 8% to 12% to a permanent loan at 5.25% to 7.25% generates immediate cash flow improvement and eliminates the near-term maturity risk inherent in bridge financing.
Property value increase through appreciation, renovations, or improved operations creates refinancing opportunities to access equity. Orlando properties in strong submarkets have appreciated significantly, and owners who purchased three to five years ago may be able to extract substantial equity through cash-out refinancing while maintaining conservative loan-to-value ratios.
Loan structure optimization motivates refinancing when the existing loan structure no longer aligns with the investment strategy. Examples include converting from variable-rate to fixed-rate to reduce interest rate risk, extending the amortization to reduce monthly payments, removing personal guarantees by refinancing into non-recourse programs, and consolidating multiple loans into a single, more efficient structure.
How Do Lenders Evaluate Orlando Commercial Refinance Applications?
Refinance underwriting in Orlando evaluates the property's current performance, the borrower's financial strength, and the market's support for long-term property value. Understanding these criteria helps borrowers prepare applications that achieve the most favorable terms.
Debt service coverage ratio requirements for Orlando commercial refinances typically range from 1.20x to 1.40x, depending on property type and loan program. Multifamily properties refinancing into agency programs typically need 1.20x to 1.25x. Commercial properties (office, retail, industrial) require 1.25x to 1.40x. The DSCR is calculated using the property's trailing 12-month NOI divided by the proposed annual debt service at the new loan terms.
Loan-to-value ratios for Orlando commercial refinances range from 65% to 85%, depending on the program. Agency refinances allow up to 80% LTV for rate-and-term and 75% for cash-out. Conventional bank refinances cap at 65% to 75%. CMBS refinances offer up to 75%. SBA 504 refinances provide up to 90% for owner-occupants. The property's current appraised value, not the original purchase price, determines the refinance basis.
Property performance documentation is the cornerstone of refinance underwriting. Lenders require trailing 12-month operating statements, a current rent roll, lease abstracts for commercial tenants, and a capital expenditure history. For recently renovated Orlando properties, lenders want to see evidence that the renovations are complete and the property has achieved stabilized occupancy and income levels.
Borrower evaluation includes personal financial statements, credit history, a schedule of real estate owned, and demonstrated property management experience. For non-recourse programs (agency, CMBS), borrower qualification focuses on net worth and liquidity rather than income. For recourse programs (bank loans, SBA), income and debt-to-income ratios are also evaluated.
Orlando-specific refinance considerations include the property's current insurance costs (Florida's elevated windstorm coverage directly impacts NOI), the expected property tax assessment at the time of refinance (which may differ from the current assessment), and any environmental conditions that could affect property value.
What Are the Current Refinance Rates for Orlando Commercial Properties?
Refinance rates for Orlando commercial properties vary by property type, loan program, and borrower qualification. Understanding the rate landscape helps property owners evaluate the financial benefit of refinancing.
Agency refinance rates for stabilized Orlando multifamily properties represent the most competitive permanent financing available, with rates starting in the low-to-mid 5% range and most transactions pricing between 5.50% and 6.50%. Properties with strong occupancy, consistent rent collections, and favorable DSCR ratios in premium submarkets like Lake Nona, Winter Park, and Downtown Orlando command rates at the lower end.
Conventional bank refinance rates for Orlando commercial properties range from 5.75% to 7.75%, with the specific rate determined by property type, occupancy, tenant quality, loan structure, and the borrower's banking relationship. Retail and industrial properties with strong NNN tenants tend to price at the lower end, while office properties face slightly wider spreads due to sector-specific risk perceptions.
CMBS refinance rates for Orlando commercial properties range from 5.75% to 7.25%, offering fixed-rate, non-recourse terms that appeal to investors seeking predictable payments without personal liability. CMBS refinancing works particularly well for stabilized retail centers, industrial properties, and office buildings with strong tenant rosters.
SBA 504 refinance rates for owner-occupied Orlando commercial properties offer among the most attractive terms, with the blended rate typically between 5.50% and 7.00%. The CDC portion's below-market fixed rate and 25-year term provide exceptionally low and predictable payments for qualifying business owners.
DSCR refinance rates for Orlando investment properties range from 6.0% to 9.0%, with the most competitive pricing for properties with DSCRs above 1.30x, LTVs below 70%, and borrower credit scores above 740. DSCR refinancing is the most streamlined path for investors seeking to refinance without providing personal income documentation.
A commercial mortgage calculator helps Orlando property owners compare current loan payments with projected refinance payments to quantify the financial benefit.
What Are the Costs of Refinancing a Commercial Property in Orlando?
Understanding the full cost of refinancing is essential for determining whether the financial benefits justify the transaction. Orlando commercial refinances involve several cost categories that should be factored into your analysis.
Prepayment penalties on the existing loan are often the largest refinancing cost. Common structures include yield maintenance (which compensates the lender for lost interest income), step-down penalties (such as 5-4-3-2-1 declining annually), lockout periods (during which no prepayment is allowed), and flat percentage penalties. Reviewing your existing loan documents to understand the current prepayment terms is the first step in evaluating refinancing feasibility. Some loans have open prepayment windows near maturity that eliminate this cost.
Closing costs for Orlando commercial refinances typically range from 1.5% to 4.0% of the new loan amount. Components include origination fees (0.5% to 2.0%), appraisal ($2,000 to $10,000 depending on property size and complexity), title insurance and search ($2,000 to $8,000), attorney fees ($2,000 to $5,000), survey ($2,000 to $5,000 if an updated survey is required), environmental review ($2,000 to $5,000), and lender legal fees.
Florida-specific costs add to the refinancing expense. Documentary stamp taxes on the new mortgage are assessed at $0.35 per $100 of the loan amount. Intangible tax is assessed at $0.20 per $100 of the loan amount. Combined, these Florida taxes add approximately 0.55% to the cost of any new mortgage. On a $5 million refinance, Florida documentary stamp and intangible taxes total approximately $27,500. A credit may be available for the documentary stamps paid on the original mortgage, which can reduce this cost.
Breakeven analysis calculates how many months of savings from the lower rate are needed to recoup the total refinancing costs. Divide the total refinancing cost (prepayment penalty plus closing costs plus Florida taxes) by the monthly payment savings to determine the breakeven period. If the breakeven period is significantly shorter than the remaining hold period, refinancing is financially justified.
How Can Orlando Property Owners Access Equity Through Refinancing?
Cash-out refinancing has become a popular strategy for Orlando commercial property owners seeking to deploy accumulated equity into new investments, property improvements, or other financial objectives.
Orlando's strong property value appreciation, driven by population growth, economic diversification, and sustained investment demand, has created substantial equity in many commercial properties. Owners who purchased properties three to five years ago have often seen values increase by 15% to 30% or more, depending on the submarket and property type. Combined with mortgage amortization that reduces the loan balance over time, many Orlando property owners can access significant cash through refinancing while maintaining conservative loan-to-value ratios.
Cash-out LTV limits for Orlando commercial refinances are typically 5% to 10% lower than rate-and-term limits. Agency cash-out refinances for multifamily properties allow up to 75% LTV. Conventional bank cash-out refinances typically cap at 65% to 70% LTV. CMBS cash-out refinances allow up to 70% to 75% LTV. DSCR cash-out refinances offer up to 70% to 75% LTV. The property must meet the program's DSCR requirements at the higher cash-out loan amount.
Common uses for cash-out refinance proceeds in Orlando include funding down payments on additional investment properties to grow a portfolio, financing property improvements that further increase value and income, repaying higher-cost debt including personal loans, lines of credit, or mezzanine financing, establishing reserves for future capital expenditures, and funding business expansion for owner-occupied properties.
The tax treatment of cash-out refinance proceeds is generally favorable, as borrowed funds are not considered taxable income. However, the deductibility of interest on the cash-out portion depends on how the funds are used. Consult a tax professional to understand the specific implications for your situation.
A strategic approach to cash-out refinancing can create a self-reinforcing portfolio growth cycle. An Orlando investor extracts $500,000 in equity from an appreciated property, uses those funds as a down payment on a second property, builds equity in the second property through appreciation and amortization, and eventually repeats the process. This approach, sometimes called the BRRRR strategy (buy, renovate, rent, refinance, repeat), has been particularly effective in Orlando's growing market.
What Documentation Do Orlando Property Owners Need for Refinancing?
Preparing a complete and organized documentation package accelerates the refinancing process and demonstrates the professionalism that lenders associate with strong borrowers.
Property documentation forms the foundation of any Orlando commercial refinance application. Required items include trailing 12-month operating statements showing all income and expenses, a current rent roll with tenant names, unit sizes, rental rates, lease terms, and occupancy status, copies of all leases for commercial tenants, property tax bills for the most recent two years, current insurance policy declarations pages, a list of capital improvements made during ownership, and any existing environmental reports or surveys.
Existing loan documentation is needed to understand the current financing terms and any prepayment implications. Gather the current loan statement showing the outstanding balance, the original loan documents including the note and mortgage, any modification or extension agreements, the prepayment provision from the note or separate prepayment agreement, and the maturity date and any remaining extension options.
Borrower documentation requirements vary by program. Recourse loans (bank, SBA) require personal financial statements for all guarantors, two years of federal tax returns, a schedule of real estate owned with current values and debt, and bank statements verifying liquidity. Non-recourse programs (agency, CMBS) focus on net worth and liquidity verification rather than income.
Orlando-specific documentation should include current windstorm mitigation inspection reports, flood zone determination, property tax assessment details including any pending appeal, and documentation of any homeowner association or condominium requirements that may apply.
For recently renovated properties seeking to refinance out of bridge loans, prepare before-and-after documentation showing the scope and quality of improvements, updated rent rolls demonstrating stabilized occupancy and achieved rents, and contractor invoices or certificates of completion confirming the renovation work has been finished.
How Does Refinancing Fit Into a Long-Term Orlando Investment Strategy?
Strategic refinancing is not merely a one-time transaction but an ongoing portfolio management tool that Orlando commercial property investors use to optimize returns, manage risk, and fund growth throughout their investment lifecycle.
Portfolio growth through equity recycling uses cash-out refinancing to extract equity from appreciated Orlando properties and deploy it as down payments for additional acquisitions. This strategy leverages Orlando's property appreciation to accelerate portfolio expansion without requiring new outside capital. Successful implementation requires maintaining conservative leverage (65% to 75% LTV) to preserve financial flexibility and weather potential market fluctuations.
Risk management through rate structure optimization uses refinancing to convert from variable-rate to fixed-rate terms when the interest rate outlook suggests rising rates, or to lock in lower rates when the opportunity arises. Orlando property owners with variable-rate loans can reduce uncertainty by refinancing into fixed-rate products, providing predictable cash flow projections and eliminating the risk of payment increases.
Debt reduction through amortization acceleration uses refinancing into shorter-term or faster-amortizing loans to build equity more rapidly. While monthly payments increase, the accelerated equity accumulation positions the owner for larger cash-out refinancing proceeds in the future or a higher net sale price.
Exit preparation through loan structuring uses refinancing to position a property for eventual sale. Refinancing into an assumable loan product (such as agency or CMBS) can make the property more attractive to buyers by offering a below-market interest rate that the buyer can assume, potentially supporting a higher sale price.
Tax-efficient income through refinancing allows property owners to access property value appreciation without triggering capital gains taxes. Cash-out refinance proceeds are not taxable income, making refinancing a tax-efficient alternative to selling a property to access its accumulated equity.
Engage a commercial mortgage broker with Orlando market expertise to evaluate your entire portfolio for refinancing opportunities and develop a strategic plan that aligns with your long-term investment objectives.
Contact Clearhouse Lending to discuss your Orlando commercial refinancing needs and receive a customized rate quote for your property.
Frequently Asked Questions About Commercial Refinancing in Orlando
How soon can I refinance a commercial property in Orlando after purchasing it?
Seasoning requirements for Orlando commercial refinances vary by program. DSCR loans may allow refinancing as soon as 3 to 6 months after acquisition. Conventional bank loans typically require 6 to 12 months of ownership. Agency loans (Fannie Mae and Freddie Mac) often require 12 months of seasoning for cash-out refinances but may waive this for rate-and-term refinances. CMBS loans typically require 12 months. SBA 504 refinancing is available without a seasoning period for eligible business owners refinancing existing commercial debt.
What is the minimum loan amount for an Orlando commercial refinance?
Minimum loan amounts for Orlando commercial refinances vary by program. DSCR loans may be available starting at $100,000 to $150,000. Conventional bank loans typically start at $250,000 to $500,000. SBA 504 refinances start at approximately $500,000. CMBS refinances generally require $2 million minimum. Agency (Fannie Mae small balance) refinances start at $750,000. Life insurance company refinances typically start at $5 million. The optimal program depends on your property's value and the loan amount sought.
Can I refinance an Orlando commercial property with below-average occupancy?
Refinancing an Orlando commercial property with below-average occupancy is possible but more limited. Standard permanent loan programs (agency, CMBS, bank) typically require 80% to 90% occupancy for commercial properties and 85% to 95% for multifamily. Properties with lower occupancy may need to pursue bridge loan refinancing at higher rates (7.5% to 11.0%), DSCR loans if the existing income still meets minimum coverage, or short-term bank loans with recourse structures. Alternatively, improving occupancy before refinancing will expand your program options and secure more competitive terms.
How do prepayment penalties work on Orlando commercial loans?
Prepayment penalties on Orlando commercial loans protect lenders against early repayment and come in several forms. Yield maintenance calculates the present value of remaining scheduled interest payments, often resulting in significant costs. Step-down penalties start high and decline annually (such as 5% in year one, 4% in year two, down to 1% in year five). Lockout periods prohibit any prepayment for a specified period, typically 1 to 3 years. Flat penalties charge a fixed percentage regardless of timing. Open periods allow penalty-free prepayment, typically in the final 3 to 6 months before maturity. Understanding your current loan's prepayment terms is essential before beginning the refinancing process.
What is the tax impact of a cash-out refinance on an Orlando commercial property?
Cash-out refinance proceeds are generally not considered taxable income because they represent borrowed funds that must be repaid. This makes refinancing a tax-efficient way to access property equity compared to selling, which would trigger capital gains taxes. However, the deductibility of interest on the cash-out portion depends on how the proceeds are used. Interest on funds used for business or investment purposes is generally deductible, while interest on funds used for personal purposes may not be. Additionally, refinancing does not affect the property's depreciation schedule, which continues based on the original cost basis. Consult a tax professional for guidance specific to your situation.
How long does it take to close a commercial refinance in Orlando?
Closing timelines for Orlando commercial refinances vary by program. DSCR refinances close in 21 to 45 days. Conventional bank refinances take 45 to 60 days. CMBS refinances require 60 to 90 days. Agency (Fannie Mae and Freddie Mac) refinances take 45 to 75 days. SBA 504 refinances require 60 to 90 days. HUD/FHA refinances take 90 to 120 days. Starting the process 6 months before your existing loan maturity provides adequate time for program selection, underwriting, and closing.
Moving Forward With Your Orlando Commercial Refinance
Orlando's commercial property market, supported by exceptional population growth, tourism-driven demand, and economic diversification, creates favorable conditions for refinancing across all property types. Whether you are converting a bridge loan to permanent financing after completing a value-add project, extracting equity from an appreciated property to fund additional acquisitions, securing a lower rate on an expiring loan, or restructuring debt to align with your long-term investment strategy, understanding the refinancing landscape is essential for optimizing your portfolio's financial performance.
The key to a successful Orlando commercial refinance is matching your property's specific characteristics and your financial objectives with the program that delivers the best combination of rate, leverage, structure, and flexibility. Each program serves a distinct purpose, and the right choice depends on your unique situation.
Contact Clearhouse Lending to discuss your Orlando commercial refinancing needs and get a customized rate quote tailored to your specific property and financial goals.