Life insurance company (life co) mortgages have long been the gold standard for commercial real estate borrowers looking for very long-term fixed rates. Life insurance companies look to make conservative loans on high quality assets, so the best matches are often Class A office buildings in top markets, anchored shopping centers with strong sales, and top-tier hotels. Multifamily properties often go for agency loans from Fannie and Freddie, but can also be a good fit.
Even compared to CMBS loans, life insurance loans often offer the best rates. However, borrowers will need to bring a larger amount of equity to the deal because the leverage point for life co mortgages typically maxes out between 55% and 70% LTV. This is compounded by the conservative underwriting standards used by life insurance companies in calculating the value of a property. In addition, life insurance companies demand very experienced sponsorship (borrowers). For properties and borrowers that do qualify, insurance company loans can be used for acquisition, refinance, and even (sometimes) construction.
Insurance company loans can be difficult for non-institutional borrowers to obtain directly. Life insurance companies often do not have a large customer-facing organization for real estate lending. Less experienced borrowers looking for their first Life Co loan will find it almost impossible to get quotes by directly contacting insurance companies. For all types of borrowers, a great solution to these hurdles is to submit your loan request to StackSource. Your StackSource Capital Advisor will work with insurance companies to get you actionable quotes without all the hassle.Start Your Loan Request
Life insurance companies offer a variety of loan terms, rate, amortization, and recourse options. As a general rule, insurance companies look to lend on high quality properties in major cities. A great property with an experienced borrower will have the best opportunity to negotiate for favorable terms. However, it's always worth giving life insurance company loans a shot on projects that may qualify. In addition to bank loan quotes and CMBS loan quotes, reviewing life insurance company loan quotes is an important piece of your search for the best financing option.