Due to their relationships with multiple lenders and industry experience, good commercial mortgage brokers can negotiate better rates and terms for borrowers while increasing their chances of closing.
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What is a Credit Tenant Lease?
A credit tenant lease, or CTL, is a type of long-term lease in which the tenant's creditworthiness is used as collateral for a commercial real estate loan. The lender, typically a bank, life insurance company, or CMBS lender, agrees to make a loan to the owner of the property leased by the credit tenant. CTLs are often used by major corporations, educational institutions, or government agencies who want to lease space in high-end office buildings or large retail centers. Credit tenant lease terms are typically between 10-15 years.
Do Commercial Loans Require Commercial Mortgage Insurance?
Most single-family home mortgages require the borrower to pay private mortgage insurance (PMI), or, for HUD and USDA loans, a mortgage insurance premium (MIP). This insurance protects the lender in case the borrower falls behind on their payments or defaults on their loan. However, the vast majority of multifamily and commercial real estate loans do not require mortgage insurance, with the exception of HUD multifamily loans.
