Lender · Houston, TX · Member since 2026 · 120 posts · 22 votes
A question I get a lot: can I refinance a commercial property into long-term debt after a recent credit event?
Some 30-year fixed, no-balloon commercial programs have no minimum credit score, and for recent credit events there's a lower-leverage option around 50% LTV. They cover office, retail, warehouse, self-storage, automotive, small assisted living, 5+ unit and mixed-use. The property carries the file: use, income, occupancy, then the borrower's liquidity and experience. Land, hospitality and manufactured homes are out.
The full breakdown is on my website, via my profile. Investors can sign up there for new reports by email.
For anyone who's been through it: did lower leverage make the deal still work, or did you wait out the credit event?
Interesting breakdown. It’s good to know that financing options may still be available after a credit event, even if the borrower needs to work with lower leverage. Do you also work with referral partners who connect you with investors looking for commercial property financing?
Laying out the property types up front saves people a wasted application, and in these files the number that usually decides it is the existing payoff, not the score. At 50% LTV the question is whether the current balance fits under half the appraised value. If it doesn't, the borrower is bringing cash to close. That's where they commonly choose between paying down, waiting out the credit event, or using short-term bridge money while it ages. The other thing to ask before signing is the prepayment terms. Long-term fixed commercial debt often carries a prepay penalty, so someone planning to refinance into higher leverage once their credit recovers can find that exit costs more than expected. A low-leverage loan works best when it's the loan you plan to keep.
Noah, agreed, and the payoff point is the right one. On these files the existing balance decides it more than the score. If it doesn't fit under the lower leverage, the borrower is choosing between bringing cash, waiting for the credit event to age, or a short bridge in the meantime. Your prepayment point is the one people miss. If the plan is to refinance into higher leverage once the credit recovers, a step-down prepay on long-term debt can cost more than the extra leverage is worth. The low-leverage loan works best as the loan you mean to keep.
Scarlett, sorry for the slow reply. Yes, I work with referral partners, mostly brokers and other lenders who run into commercial files that fall outside their own box. The forums don't allow contact details, so send me a message through my profile if you'd like to talk about it.
For anyone who has refinanced after a credit event: did you take the lower leverage, or wait it out?