The 2025-2026 Commercial Debt Market Report: Bridging the Liquidity Gap in a Transitional Economy

 

Executive Summary: The Great Recalibration

The global commercial real estate (CRE) finance sector stands at a precipice as it closes out 2025. After three years of relentless monetary tightening, the market has entered a phase of fragile stabilization, characterized by the recalibration of asset values, the normalization of interest rates, and a fundamental restructuring of the capital stack. This report provides an exhaustive analysis of the commercial debt markets as of December 2025, exploring the macroeconomic currents, regional idiosyncrasies, and the burgeoning role of private credit in filling the vacuum left by retreating banking institutions.

December 2025 marks a psychological and structural pivot point. The Federal Reserve, having acknowledged the cooling labor market and stabilizing inflation data, has initiated a cycle of rate reductions, lowering the federal funds rate target to a range of 3.75% to 4.00%.1 However, the transmission of these policy shifts to the street level of commercial lending is neither instantaneous nor uniform. While the cost of indices like the Secured Overnight Financing Rate (SOFR) has moderated to approximately 4.00% 3, the risk premiums charged by lenders remain elevated, reflecting lingering uncertainties regarding asset valuations and the geopolitical landscape.

In this environment, the “Maturity Wall”—a staggering $957 billion of commercial mortgages maturing in 2025 alone—has become the central narrative of the industry.4 A significant portion of these loans, originated during the low-rate era of 2020-2022, cannot be refinanced at par through traditional channels due to the dual pressures of higher debt service constants and lower appraised values. This disconnect has birthed a massive liquidity gap, one that traditional depositories, constrained by the regulatory tightening of the Basel III Endgame and their own balance sheet challenges, are largely unwilling to bridge.

Into this breach has stepped the private credit sector. No longer a fringe component of the market, private debt funds and direct lenders have evolved into the primary liquidity providers for transitional and value-add real estate. Firms such as Capital Funding, with their discretionary capital and asset-based underwriting models, exemplify the new paradigm of lenders who prioritize speed and certainty of execution over the rigid bureaucratic processes of legacy banks.5 The bridge loan, once stigmatized as a “loan of last resort,” has been rehabilitated into a strategic “bridge to stabilization,” allowing sponsors to navigate the turbulence of renovation, lease-up, and market repositioning before securing permanent financing.

This report dissects these trends across multiple dimensions. It examines the distinct micro-climates of key markets—from the office-to-residential conversion boom in New York City to the condo termination crisis in South Florida and the luxury bridge markets of California. It analyzes the specific mechanics of modern bridge financing, detailing how sophisticated sponsors are utilizing cross-collateralization and interest reserves to unlock leverage. Finally, it offers a forward-looking perspective on 2026, positing that while the era of “cheap money” remains in the rearview mirror, the era of “smart money”—agile, private, and solution-oriented—has firmly taken hold.

1. The Macroeconomic Context: Navigating the Late 2025 Pivot

 

To understand the granular realities of a bridge loan term sheet in late 2025, one must first map the tectonic shifts in the broader economy. The cost of capital for every real estate project, from a single-family fix-and-flip in Texas to a skyscraper conversion in Manhattan, is ultimately downstream from the decisions made by the Federal Open Market Committee (FOMC) and the trading dynamics of the U.S. Treasury market.

 

1.1 The Federal Reserve’s Policy Shift

 

The economic narrative of 2025 has been defined by the Federal Reserve’s delicate pivot from inflation containment to growth preservation. For much of 2023 and 2024, the Fed maintained a restrictive stance, keeping rates at multi-decade highs to crush the inflationary impulses triggered by pandemic-era stimulus and supply chain shocks. This policy was successful in bringing inflation down toward the 2% target, but it came at the cost of transaction volume in the real estate sector, which ground to a virtual halt as borrowing costs soared.

By the fourth quarter of 2025, however, the data began to turn. Job gains slowed significantly, and the unemployment rate ticked up to 4.7%.6 Recognizing the risks of over-tightening—which could precipitate a recession rather than a soft landing—the FOMC shifted gears. In October 2025, the Fed reduced the target range for the federal funds rate by 25 basis points to 3.75%–4.00%.1

This reduction was more than a numerical adjustment; it was a signal. It marked the official end of the tightening cycle and the beginning of a normalization phase. Market participants now anticipate further cuts, with the December 10, 2025 meeting expected to deliver another reduction, potentially bringing the base rate down to 3.50%.7 For commercial borrowers, specifically those on floating-rate bridge loans tied to SOFR, this trajectory offers the first tangible relief in debt service coverage in years.

 

1.2 The Treasury Yield Curve and Long-Term Rates

 

While the Fed controls the short end of the curve (affecting floating rate bridge loans), the long end of the curve—specifically the 10-Year Treasury yield—dictates the pricing of permanent, fixed-rate mortgages. Understanding the relationship between these two is critical for bridge borrowers, as the 10-Year Treasury represents their “exit” environment.

As of late November 2025, the 10-Year Treasury yield hovers around 4.00%, while the 30-Year Treasury sits at 4.64%.8 This persistent inversion and elevation of the long end of the curve suggests that the market remains skeptical about the long-term fiscal health of the United States and expects inflation to be “sticky” in the medium term.

Implications for Real Estate Strategies:

• The Bridge Trap: If short-term rates (SOFR) fall faster than long-term rates (10-Year Treasury), borrowers may be tempted to stay on floating-rate bridge loans longer than necessary, betting on a drop in permanent mortgage rates that may not materialize quickly.
• Negative Leverage: With the 10-Year Treasury at 4% and spreads for permanent CMBS or Life Co loans at 200-250 basis points, the “all-in” permanent rate is roughly 6.00%–6.50%.9 For assets trading at 5% cap rates (like high-quality multifamily), this creates “negative leverage,” where the cost of debt exceeds the yield of the asset. This dynamic forces investors to use bridge loans to boost NOI aggressively until the yield on cost surpasses the cost of debt.

 

1.3 The Dominance of SOFR

 

The transition from LIBOR (London Interbank Offered Rate) to SOFR (Secured Overnight Financing Rate) is now a historical chapter, fully resolved by mid-2023.10 By late 2025, SOFR is the undisputed benchmark for the US dollar floating-rate market.

The mechanics of SOFR are distinct from LIBOR. Being a secured overnight rate derived from the Treasury repurchase market, it is virtually risk-free, unlike LIBOR which contained bank credit risk. As of December 1, 2025, the 30-Day Average SOFR stands at approximately 4.00%.3

The “SOFR + Spread” Model:

Modern commercial bridge loans are almost universally priced as a spread over SOFR.

• Base Rate: ~4.00% (SOFR)
• Spread: 450 to 850 basis points (depending on risk).5
• All-In Rate: 8.50% to 12.50%.

This transparent pricing model allows borrowers to hedge their exposure precisely. Cap rates (derivative contracts that cap the maximum interest rate) are now liquid and standard requirements for closing bridge loans. The stabilization of the SOFR market has reduced the “friction costs” of hedging, making it easier for borrowers to meet the strict covenants required by institutional lenders.11

2. The Banking Retreat and the Liquidity Vacuum

 

To comprehend the necessity of private bridge lending in 2025, one must analyze why traditional banks—the historical engines of real estate finance—have stalled. The retreat of the banking sector is not merely cyclical; it is a structural response to regulatory pressure and portfolio toxicity.

 

2.1 The Basel III Endgame and Regulatory Tightening

 

The implementation of the “Basel III Endgame” regulations has forced U.S. banks to hold significantly more capital against their risk-weighted assets. Commercial real estate, particularly non-stabilized “transitional” assets, attracts a high risk-weighting. This makes lending on a renovation project or a lease-up play prohibitively expensive for a bank in terms of capital allocation.

Furthermore, the scars of the 2023 regional banking crisis (the failures of Silicon Valley Bank, Signature Bank, and First Republic) remain fresh. Regulators have intensified their scrutiny of commercial real estate concentration on bank balance sheets. Banks with high exposure to CRE are being pressured to reduce their portfolios, not expand them. This has led to a phenomenon known as “denominating out”—where banks reduce their loan-to-value (LTV) limits and increase their debt service coverage ratio (DSCR) requirements to effectively screen out all but the most pristine borrowers.

 

2.2 The Maturity Wall: A $957 Billion Challenge

 

The most immediate catalyst for the liquidity crisis is the “Maturity Wall.” According to the Mortgage Bankers Association, approximately $957 billion of commercial mortgages are set to mature in 2025.4 This represents a 3% increase from the previous year, exacerbated by the “extend and pretend” modifications granted in 2024.

The Refinancing Gap:

Consider a hypothetical office building bought in 2021 for $100 million with a $75 million loan (75% LTV) at 3.5% interest.

• 2021 NOI: $5 million (5% Cap Rate). Debt Service: ~$2.6 million. DSCR: 1.92x (Healthy).
• 2025 Reality: The loan matures. The building is now valued at $80 million due to cap rate expansion. The new interest rate is 6.5%.
• New Debt Service: On the same $75 million loan, debt service would be ~$4.9 million.
• New DSCR: 1.02x (Unfinanceable by banks). Banks typically require a 1.25x DSCR.5
• The Gap: To get a 1.25x DSCR, the maximum loan proceeds are roughly $61 million. The borrower must pay down the existing $75 million loan by bringing $14 million of new cash to the table—cash they likely do not have.

This $14 million gap is where bridge lending becomes essential. A bridge lender, unlike a bank, may be willing to lend $70 or $75 million based on the future value of the asset, allowing the borrower time to increase rents or sell the property, rather than facing immediate foreclosure.

3. The Rise of Private Credit: The New Capital Paradigm

 

As banks retreat to the safety of stabilized assets, private credit has surged to become the dominant force in the transitional lending market. By late 2025, it is estimated that over 50% of small business and transitional CRE financing is secured through private lenders.12 This shift represents a democratization of capital access, moving away from the deposit-based lending of banks to the investor-based lending of debt funds.

 

3.1 The Private Lender Spectrum

 

The private lending market is highly stratified, offering a range of products for different borrower profiles.

Lender Category	Typical Profile	Cost of Capital	Speed	Flexibility
Institutional Debt Funds	Blackstone, Starwood, PGIM	SOFR + 350-500	Medium (4-6 weeks)	Low (Strict covenants)
Direct Private Lenders	Capital Funding, Family Offices	SOFR + 450-850	High (1-3 weeks)	High (Asset-based)
Hard Money Lenders	Local/Regional Shops	12% – 15% Fixed	Very High (3-10 days)	Very High (Recourse heavy)

Source Analysis: 5

 

3.2 Case Study: Capital Funding (https://capitalfunding.com)

 

Capital Funding serves as an exemplary case study of the modern direct private lender. Their operational model addresses the specific friction points of the 2025 market: the need for speed, the lack of income documentation for entrepreneurs, and the focus on asset value over borrower credit.

Program Highlights:

1. The Hard Money Program:

• Target: Investors needing “rescue capital” or incredibly fast acquisition financing for residential or small commercial assets.
• Speed: Closing in 3 to 14 days.5 This speed is a currency in itself. In competitive markets like Miami or Los Angeles, an all-cash offer (or one backed by a lender who can close in a week) can secure a property at a 5-10% discount compared to an offer contingent on a 60-day bank close.
• Underwriting: No minimum credit score and no income verification (tax returns) required. This is critical for self-employed real estate professionals who often show losses on tax returns due to depreciation, despite having strong cash flow.5
• Rates: 10.00% – 12.99%. While higher than bank rates, the cost is justified by the opportunity to secure the deal.

1. The Commercial Bridge Loan Program:

• Target: Value-add projects (Multifamily, Industrial, Retail) requiring renovation and stabilization.
• Structure: Floating rate (1 Month SOFR + 450-850 bps). This aligns the borrower’s cost with the market’s trajectory; as the Fed cuts rates in 2026, the borrower’s interest expense will arguably decrease.
• Leverage: Up to 75% LTV, significantly higher than the 55-60% typically offered by banks in 2025.5
• Recourse: Non-recourse options are available, a major advantage for sponsors who want to limit contingent liabilities on their personal balance sheets.

This “asset-first” approach is the antithesis of the “credit-first” approach of regulated banks, making firms like Capital Funding essential liquidity providers in a credit-constrained environment.

4. Regional Market Dynamics: A Tale of Four Markets

 

The national narrative of high rates and maturity walls plays out differently across the distinct micro-economies of the United States. In 2025, real estate is hyper-local, with regulations and migration patterns creating winners and losers.

 

4.1 New York City: The Conversion Imperative

 

New York City’s real estate market in 2025 is dominated by one overarching theme: the obsolescence of Class B and C office space and the desperate need for housing.

• The Crisis: Manhattan office vacancy remains stubbornly high, hovering around 22.3% as of August 2025.13 Hybrid work has become permanent for many industries, rendering millions of square feet of mid-century office towers in Midtown and the Financial District effectively useless in their current form.
• The Opportunity: Office-to-residential conversion has surged to record levels. Over 4.1 million square feet of office space is undergoing conversion in 2025.14
• The Financing Need: These projects are notoriously difficult to finance. They involve significant construction risk, complex zoning navigation, and a long period of zero cash flow. Traditional construction lenders are wary.
• The Bridge Solution: Bridge lenders are funding the acquisition and pre-development phase. A typical loan might cover the purchase of a vacant office building at $200/sqft (a deep discount) and fund the “soft costs” of architectural plans and zoning approvals.
• Policy Support: The “City of Yes” initiative and the 467-m tax incentive have made these deals viable.15 Lenders are underwriting the deal based on the future residential value (often $1,200+/sqft for condos or $80/sqft rents), allowing for higher leverage on the acquisition.

 

4.2 South Florida: The Condo Termination Tsunami

 

South Florida represents a unique distress opportunity driven by regulatory shock following the tragedy at Surfside.

• The Catalyst: Bill HB 913 and subsequent safety regulations require older condos to fully fund their reserves and complete structural milestone inspections by 2025.
• The Fallout: Many condo associations, particularly in older buildings along the coast, are facing special assessments ranging from $50,000 to over $100,000 per unit. Unit owners, often retirees on fixed incomes, cannot pay.
• The “De-Conversion” Trend: Developers are targeting these distressed buildings for “Condo Terminations.” They buy out all unit owners, dissolve the association, demolish the building, and build a new luxury tower.16
• Role of Bridge Lending: This strategy requires massive, fast capital. A developer needs $50M-$100M to close on 100+ units simultaneously. Banks struggle with this complexity. Private bridge lenders step in to fund the bulk acquisition, securing the loan against the prime waterfront land value. The loan is exited via a construction loan once the site is cleared and permitted.17

 

4.3 California: Luxury and Legislation

 

California’s market is a study in contrasts, battling high taxes and regulatory hurdles while sustaining massive luxury demand.

• The “Mansion Tax” (ULA): In Los Angeles, the transfer tax on properties over $5 million has chilled the sales market. Sellers are holding properties rather than selling and taking the tax hit.
• Luxury Bridge Demand: Consequently, wealthy owners are using bridge loans to pull equity out of their properties (cash-out refinances) to fund other investments, rather than selling the asset. This “equity release” market is booming for private lenders who are comfortable with high-end residential collateral.18
• Private Lending Saturation: California has the highest density of private mortgage lenders in the nation. This competition compresses rates. While a bridge loan in Texas might price at 11%, a similar risk profile in California might price at 9.5% due to the sheer volume of available private capital.19
• Tech Sector Impact: In the Bay Area, the AI boom is creating a new wave of wealth. These buyers often have complex income streams (stock options, IPOs) that traditional banks cannot underwrite. Private bridge loans allow them to buy homes with “cash-like” terms and refinance later when their income is seasoned.20

 

4.4 Texas and the Sunbelt: The Supply Glut

 

Texas, particularly Austin and Dallas, is facing a different challenge: too much of a good thing.

• The Supply Wave: A record number of multifamily units were delivered in 2024 and 2025. This surge in supply has flattened rent growth and increased vacancies.
• Lease-Up Risk: Developers who built with construction loans (often floating rate) are finding that they cannot exit to permanent financing because they haven’t reached “stabilized occupancy” (typically 90%).
• The Bridge Bridge: Lenders are providing “lease-up bridges.” These loans pay off the construction lender and give the developer another 12-18 months to slowly lease up the building without dropping rents drastically to fill it. This preserves the asset’s long-term value.
• Rate Environment: Because Texas has lower barriers to entry and unlimited land, lenders are more conservative on LTV (capping at 65-70%) compared to land-constrained markets like NY or CA.21

5. Operational Mechanics: The Anatomy of a 2025 Bridge Loan

 

Understanding why bridge loans are needed is only half the equation. Understanding how they are structured is critical for any market participant. The operational mechanics of these loans have evolved to mitigate the specific risks of the 2025 economy.

 

5.1 Underwriting: Debt Yield vs. DSCR

 

In a stabilized loan, the Debt Service Coverage Ratio (DSCR) is king. In a bridge loan, the Debt Yield is the primary metric.

• Metric Definition: Debt Yield = Net Operating Income (NOI) / Loan Amount.
• Why it Matters: Lenders use Debt Yield to determine their risk if they have to foreclose. If a lender requires a 10% debt yield, they are essentially saying, “If I take this property back, I want to earn a 10% return on my capital immediately.”
• 2025 Standards: For multifamily assets, bridge lenders typically require a stabilized debt yield of 8.25% or higher.5 This ensures that even if interest rates remain high, the property produces enough income to be refinanced by a bank or agency lender (Fannie/Freddie) upon maturity.

 

5.2 Interest Reserves: The Cash Flow solution

 

Given that many bridge loan projects (vacant buildings, deep renovations) have zero or negative cash flow at the start, how is the monthly interest paid?

The Interest Reserve Mechanism:

• Lenders will “pre-fund” an interest reserve.
• Example: A borrower needs a $10 million loan. The interest rate is 10%. Annual interest is $1 million.
• The lender approves a $10 million loan but holds back $1 million in a reserve account.
• The borrower receives $9 million in net proceeds.
• Every month, the lender pays themselves the interest payment from the reserve account.
• Benefit: The borrower has no out-of-pocket monthly payments for the first year, allowing them to focus all cash on construction and leasing.
• Risk: This reduces the effective Loan-to-Cost (LTC), forcing the borrower to bring more equity to the closing table.

 

5.3 Cross-Collateralization: Unlocking Trapped Equity

 

With LTVs capped at 65-70%, many borrowers are short on cash. Cross-Collateralization (or “Blanket Loans”) has emerged as a vital tool to bridge this gap.22

• Scenario: An investor wants to buy a $2M building but only has $400k cash (20%). The lender requires 35% down ($700k). The investor is short $300k.
• The Fix: The investor owns another property with $1M in equity. They pledge both properties as collateral for the new loan.
• Result: The lender now has massive security coverage, reducing their risk. In exchange, they lend 100% of the purchase price of the new building (or close to it).
• Capital Funding Advantage: Private lenders like Capital Funding are far more willing to structure these complex, multi-asset liens than institutional banks, which often struggle with cross-collateralizing assets in different states or of different types.5

6. Asset Class Specifics: Winners, Losers, and Survivors

 

Not all square footage is created equal. The availability and cost of bridge capital vary significantly by asset class.

Asset Class	Demand Trend	Capital Availability	Typical LTV	Key Risk Factor
Multifamily	Stable	High	70-75%	Rent Growth Stagnation
Industrial	High	High	65-70%	Supply Oversaturation
Retail (Grocery)	Rising	Medium	60-65%	Consumer Spending Pullback
Office (General)	Very Low	Very Low	50-55%	Functional Obsolescence
Office (Conversion)	Rising	High (Specialized)	65-70%	Construction Cost Overruns

Analysis:

• Multifamily: Remains the “safe haven.” Despite supply concerns, the fundamental housing shortage in the US supports long-term values. Agencies (Fannie/Freddie) provide a guaranteed exit, which gives bridge lenders comfort.25
• Industrial: The “onshoring” of manufacturing and the continued growth of e-commerce keep demand high. Lenders love the “triple net” lease structure where tenants pay all expenses.
• Office: The market is bifurcated. Trophy assets in prime cities can get financing. Everything else is toxic unless it has a conversion story. Lenders like Capital Funding will look at office deals, but the LTVs will be conservative unless the sponsor has a clear, funded plan to convert the use to residential or industrial.5

7. Future Outlook: The Road to 2026

 

As we look toward 2026, the commercial real estate market is poised for a resurgence, fueled by the stabilization of rates and the adaptability of private capital.

 

7.1 Interest Rate Forecast

 

The consensus among economists is that the Fed will continue its cutting cycle through 2026, aiming for a “neutral rate” of roughly 3.00%.7

• Impact: This will lower the “floor” for bridge loans. By mid-2026, we could see prime bridge loan rates compress from the current 9-10% range down to the high 7% range.
• Transaction Volume: Lower rates will unlock inventory. Sellers who have been “holding on for dear life” will finally be able to sell at prices that make sense for buyers. This will trigger a wave of acquisition financing.

 

7.2 The Permanent Shift to Private Credit

 

The shift toward private credit is likely permanent. The regulatory burden on banks is only increasing. The speed and flexibility of private lenders have proven addictive to borrowers.

• Prediction: We will see a “Barbell Economy” in lending. Banks will service the ultra-low risk, stabilized assets (Left side of barbell). Private credit will service everything else—construction, renovation, value-add, and opportunistic deals (Right side of barbell). The middle ground—where regional banks used to play—will continue to hollow out.

 

7.3 Technology and Speed

 

The future of lending is data-driven. Private lenders are adopting AI and automated valuation models (AVMs) to underwrite loans faster than ever. The ability to issue a term sheet in 24 hours and close in 10 days will become the standard, not the exception. Lenders who cannot match this speed will be relegated to the bottom tier of the market.

 

Conclusion

The commercial debt market of late 2025 is a crucible of change. It is a market that punishes passivity and rewards agility. The “wait and see” approach of 2023-2024 is no longer viable. The Maturity Wall is here, and it demands action.

For the borrower, the landscape is challenging but navigable. The key is to embrace the new reality: capital is available, but it comes at a premium and requires a flawless execution strategy. The bridge loan is the essential tool for this environment—a mechanism to buy time, add value, and bridge the gap to the lower-rate environment of the future.

For the industry at large, the ascent of private lenders like Capital Funding signals a healthy evolution. By decoupling real estate risk from the federally insured banking system, private credit makes the broader financial system more robust. It places risk where it belongs: with private investors seeking yield, rather than with depositors expecting safety. As we move into 2026, this dynamic, private-led capital market will be the engine that rebuilds the American real estate landscape, turning the distress of today into the stabilized assets of tomorrow.

Appendix A: Comparative Data Tables

 

Table 1: Interest Rate Benchmarks (Dec 1, 2025)

Index	Rate	Trend	Significance
Fed Funds Rate	3.75% – 4.00%	Falling	Base cost of money; drives SOFR.
30-Day SOFR	~4.00%	Stable	Benchmark for all bridge loans.
10-Year Treasury	4.00%	Volatile	Benchmark for permanent fixed loans.
30-Year Treasury	4.64%	Elevated	Indicates long-term inflation fears.
Prime Rate	7.00%	Falling	Benchmark for consumer/SBA loans.

Table 2: Capital Funding Program Matrix

Feature	Hard Money Program	Commercial Bridge Program
Best Use Case	Fix & Flip, Distressed Acquisition	Value-Add, Stabilization, Lease-Up
Loan Amount	$250k – $25 Million	$500k – $100 Million
Interest Rate	10.00% – 12.99% (Fixed)	1 Mo SOFR + 450-850 bps (Floating)
Term	12 – 24 Months	12 – 36 Months
Max LTV	Up to 65% (70% exceptions)	Up to 75%
Speed to Close	3 – 14 Days	17 – 35 Days
Key Differentiator	No Income Verification / No Min Credit	Non-Recourse / High Leverage

Source: 5

Table 3: Regional Bridge Lending Heatmap (Late 2025)

Region	Primary Driver	Risk Level	Capital Availability
New York (NYC)	Office-to-Resi Conversions	High	High (Specialized Lenders)
South Florida	Condo Terminations / Distressed Sales	Medium	Very High
California	Luxury Equity Release / Tech Wealth	Low	Very High (Saturated)
Texas	Construction Takeout / Lease-Up	Medium	Medium (Lenders cautious of supply)
Midwest	Stability / Cash Flow	Low	Medium

Appendix B: Glossary of Terms

 

• SOFR (Secured Overnight Financing Rate): The benchmark interest rate for dollar-denominated derivatives and loans, replacing LIBOR. It is based on transactions in the Treasury repurchase market.
• Debt Yield: A ratio used in underwriting defined as Net Operating Income (NOI) divided by the Loan Amount. It represents the lender’s return on cost if they foreclose.
• DSCR (Debt Service Coverage Ratio): A measure of the cash flow available to pay current debt obligations. DSCR = NOI / Total Debt Service.
• Maturity Wall: The aggregate amount of debt maturing in a specific year. A “wall” implies a large volume that may be difficult for the market to absorb or refinance.
• Non-Recourse: A loan where the lender’s only remedy in case of default is to seize the collateral (property), not the borrower’s personal assets (except in cases of fraud/bad acts).
• Cross-Collateralization: Using more than one property as collateral for a loan.
• LTV (Loan-to-Value): The ratio of the loan amount to the appraised value of the property.
• LTC (Loan-to-Cost): The ratio of the loan amount to the total cost of the project (purchase price + renovation costs).

End of Report