These are commercial mortgage loans secured by an existing commercial real estate property that has a stabilized cash flow sufficient to amortize a fixed rate loan within a fifteen to twenty five year term. Office buildings, retail centers, hospitals, medical/professional buildings, industrial facilities/warehouses, storage facilities etc. are all candidates that could qualify for this type of loan. These loans are typically placed with lenders who are considered Institutional Lenders. They have a stable, low cost source of funds and are not as subject to rate fluctuations as are commercial banks. Insurance Companies, Finance Subsidiaries of Public Companies, and some specialized Funds are sources for long term fixed rate mortgages. Typically these lenders review and analyze the appraised value of the property, tenant/owner credit quality and stability, existing leases for terms and rental rates relative to the market, and the property’s operating expenses relative to similar properties in the market. Once they are comfortable with the cash flow available to service debt, they will apply a debt service coverage ratio at their existing offered interest rate to arrive at loan amount. Permanent mortgage interest rates today generally range from four and one half percent to six percent fixed for a ten to fifteen year term. Amortization rates will vary from ten to twenty years depending on the property. AMI Lenders has investors who will consider permanent loans from one million up to fifty million.
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