Permanent Financing
Long-term debt (5-30 years) secured by stabilized commercial real estate, underwritten primarily on current cash flow. Permanent loans offer lower rates than transitional financing and are available from life companies, banks, agencies, and CMBS lenders. They are the typical "take-out" financing after construction or bridge loans.
Related Terms
Life Insurance Company (Life Co)
Insurance companies that invest policyholder premiums in commercial real estate loans. Life companies are known for offering the most competitive rates on high-quality, stabilized assets with conservative leverage (55-65% LTV). They focus on relationship lending with sophisticated borrowers and offer long-term fixed-rate loans up to 30 years with non-recourse execution.
CMBS (Commercial Mortgage-Backed Securities)
Loans originated by conduit lenders that are pooled together and sold to investors as bonds. CMBS loans offer higher leverage (up to 75% LTV) with competitive rates across all property types. They feature standardized terms, non-recourse execution, and are assumable. However, they have significant prepayment restrictions (defeasance or yield maintenance) and less flexibility than portfolio loans.
Agency Lenders (Fannie Mae / Freddie Mac)
Government-sponsored enterprises that provide liquidity to the multifamily housing market. Fannie Mae and Freddie Mac offer highly competitive rates with leverage up to 80% LTV for qualifying apartment properties. They provide interest-only options, streamlined underwriting, and are the primary source of permanent financing for stabilized multifamily assets nationwide.
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