Opening of Ace Hardwood Store. Loan provided by Commercial Loan Direct.
Written by Leane Eicoff| September 29, 2018
Getting an Application
If you are in agreement regarding the rate that was quoted to you by the CMBS Lender, the next step is for them to issue you an application. Typically, in order to be issued an application, the following additional items are needed:
Keep in mind that some of these items may be reviewed during the underwriting period rather than before the application is written, depending on the property, sponsor, and lender, so may not be required until due diligence has begun and third party reports are ordered.
When turning in your application, plan on paying a deposit of $35,000+ (depending on the size of the property, number of properties, and any additional third party reports or extensive legal work that may be needed). Anything not used is refunded.
Once you have signed your application and returned it with your deposit, the underwriting process begins. You will typically receive two separate checklists (one legal and one financial/third party due diligence) that are handled simultaneously by the underwriters and legal team. Although requirements may vary, expect to see some of the following items on your checklists:
Expect to have the property analyzed in ways that may be different than how you see your property or organize your reports. This is not to say that the lender disbelieves the Borrower"s reporting, but rather that specific standards are mandated by the rating agencies and FDIC (newly appointed overseer of CMBS shops). Keep in mind that the more quickly the items are turned in, the faster the loan closes.
These following are the typical loan features of a CMBS loan, but are subject to change depending on market conditions or regulatory changes:
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