Commercial financing, translated into plain English.
When the property is the business — a rental portfolio, a mixed-use building, a small commercial space — the loan is underwritten differently: the property's own income does much of the qualifying. That changes the paperwork, the timelines, and the strategy.
Where it shines
Investors and business owners can qualify on the property's cash flow (debt-service coverage) rather than personal tax returns, and structures exist for purchase, refinance, and cash-out across residential-investment and commercial property types.
The tradeoff to understand
Expect larger down payments, shorter or balloon terms on true commercial deals, and pricing above owner-occupied home loans. The property's rent roll and condition matter as much as your credit.
How I approach it
The first conversation is about the deal's numbers — income, expenses, coverage ratio — before any application. A deal that pencils gets a clean file; a deal that doesn't gets told honestly.
FAQ
Is this the same as a DSCR loan?
DSCR loans are one family within this space — residential investment properties qualified on rent versus payment. Larger or mixed-use properties move into true commercial underwriting.
Do I qualify personally or does the property?
Both matter, but the weight shifts to the property: its income, its expenses, its appraisal. Your credit and reserves still set the tone for pricing.
Program availability, eligibility, and terms vary by borrower, property, and location, and change over time. Educational only — not an offer, approval, or commitment to lend.