Debt Financing
The lender matrix: who will lend on this building
Eighteen lender types crossed against nine asset classes, with every conditional yes footnoted to the rule behind it. Read down the column for your asset to see who lends on it.
Every page in this pillar answers one question at a time: what a lender is, what an asset needs, what a term does. This page answers the question people actually arrive with, which is who will lend on this building. It crosses the eighteen lender types against the asset classes they finance, and marks each pair as a fit, a frequent fit, a rare one, or a fit with a condition attached. The conditions are the point. Almost every “yes, but” in the grid is a seam this pillar teaches somewhere else, and the footnote tells you which one.
Read down the column for your asset to see who lends on it. Every condition in the grid is a rule taught elsewhere in this pillar, and the footnote says where.
How to read it
Find your asset class across the top and read down. Yes means the lender family routinely finances that class. Often means it does so commonly but not as a core product. Rare means it happens at the margins. A number means yes, with a condition, and the condition is in the key below the table, with a link to the page that explains it. Every lender name links to that lender’s page. Every asset class links to its playbook or its page in the asset-classes section, which also carries a prose map of the same ground.
The nine columns collapse the twelve real estate classes into groups that share lenders. Core commercial means office, retail, and industrial, which are financed by the same families on the same logic; data centers and life sciences sit with them for lending purposes, with their own quirks noted. Hospitality and senior living are separate because they are underwritten as operating businesses. Multifamily is split at five units because the lenders are different on each side of that line.
The matrix
| Lender | 1-4 unit residential | Multifamily 5+ | Core commercial | Net lease | Hospitality | Senior living | Self-storage | Land and construction | Owner-occupied |
|---|---|---|---|---|---|---|---|---|---|
| Banks and SBA | |||||||||
| Community and regional banks | Yes (1) | Yes | Yes | Yes | Yes | Often | Yes | Yes | Yes |
| National banks | Yes (1) | Yes | Yes | Yes | Often | Rare | Often | Often | Yes |
| Credit unions and CDFIs | Yes (1) | Often | Often | Rare | Rare | Rare | Rare | Rare | Yes |
| SBA 7(a) | No | No | (2) | No | (3) | (2) | (2) | (2) | Yes (2) |
| SBA 504 | No | No | (2) | No | (3) | (2) | (2) | (2) | Yes (2) |
| Agency and HUD | |||||||||
| Fannie Mae DUS | No (4) | Yes (4) | No | No | No | (5) | No | No | No |
| Freddie Mac Optigo | No (4) | Yes (4) | No | No | No | (5) | No | No | No |
| HUD 223(f) | No (4) | Yes (4) | No | No | No | (5) | No | No | No |
| HUD 221(d)(4) | No (4) | Yes (4) | No | No | No | (5) | No | Yes (4) | No |
| Institutional and structured | |||||||||
| Life insurance companies | No | Yes (6) | Yes (6) | Yes (6) | Rare | Rare | Often (6) | No | Rare |
| CMBS and conduit | No | Yes | Yes | Yes | Yes | Rare | Yes | No | Rare |
| Debt funds and bridge | Rare | Yes (7) | Yes (7) | Often | Yes (7) | Yes (7) | Yes (7) | Yes (7) | Rare |
| Mezzanine and preferred equity | No | Yes (8) | Yes (8) | Often | Yes (8) | Often | Often | Yes (8) | No |
| Alternative | |||||||||
| DSCR loans | Yes (9) | Rare | No | No | No | No | No | No | No |
| Hard money and private | Yes (10) | Yes (10) | Yes (10) | Often | Often | Rare | Often | Yes (10) | Often |
| Seller financing | Yes (11) | Yes (11) | Yes (11) | Yes (11) | Often | Rare | Often | Yes (11) | Yes (11) |
| C-PACE | No | (12) | (12) | (12) | (12) | (12) | (12) | (12) | (12) |
| Asset-based lending | No | No | No | No | (13) | (13) | No | No | (13) |
The conditions
Each number marks a yes that depends on a rule, and each rule is taught on the linked page.
-
Residential lending. One-to-four unit property is financed under residential rules: personal recourse, conventional property caps, and the licensing regime that governs loans to individuals on homes. The one-to-four unit page covers the three lending worlds. Banks and credit unions finance it, but as residential, not commercial, product.
-
Owner-occupied only. Both SBA programs finance real estate for the business that occupies it. The 504 requires 51 percent occupancy of an existing building or 60 percent of new construction; the 7(a) carries the same expectation. A passive investor is ineligible. Where the building sits in its own LLC, the Eligible Passive Company structure must be built the SBA’s way.
-
Hospitality under the SBA short-stay test. Hotels and similar businesses are SBA-eligible when most revenue comes from stays of 30 days or less, and the owner operates the property. The hospitality playbook explains why hotels are underwritten as businesses.
-
Five or more units. Agency and HUD multifamily programs start at five units. A four-unit building is residential lending and is outside all four programs. HUD 221(d)(4) also finances construction and substantial rehabilitation of five-plus-unit property, which is why it appears under land and construction. The five-unit line is a legal cliff.
-
Senior housing under dedicated programs. Fannie, Freddie, and HUD each have seniors housing executions with their own rules, and HUD’s healthcare programs cover licensed facilities. The senior living playbook explains why the financing follows the healthcare answer.
-
Stabilized, institutional quality, low leverage. Life companies lend on the safest assets at conservative loan-to-value, typically half to two thirds of value, with long fixed terms. They pass on anything transitional or highly leveraged.
-
Transitional assets only. Bridge lenders finance the property before it is stabilized, at a floating rate and a short term, on the assumption of a permanent takeout. A stabilized asset should not be paying bridge pricing.
-
Secured by the entity, not the building. Mezzanine debt is a pledge of the membership interests, foreclosed under the UCC, enabled by an Article 8 opt-in. It fills the gap above senior debt on larger deals and requires the senior lender’s consent through an intercreditor agreement.
-
Non-owner-occupied only. DSCR loans are business-purpose credit on rentals the borrower does not live in. The exemption that makes them work collapses on owner occupancy. Some lenders extend DSCR-style underwriting to small multifamily; that is the margin, not the core.
-
Short term, priced for the exit. Hard money lends against value, fast, for months, at a premium, and underwrites the exit rather than the borrower. Legitimate hard money does not lend on owner-occupied homes.
-
Seller must own free and clear, or the wrap triggers due-on-sale. Seller financing is available on anything a seller is willing to carry. A wraparound over an existing mortgage is a transfer that triggers the underlying lender’s due-on-sale clause.
-
Qualifying improvements, and the senior lender’s consent. C-PACE funds energy, water, and resiliency improvements, and efficient new construction, as a tax assessment that primes the mortgage. It exists only in the 40 states with programs and only with the senior lender’s written consent, which is often unobtainable on a CMBS loan.
-
Lends on the operating business, not the real estate. Asset-based lending, equipment finance, and factoring reach the operating company’s equipment, inventory, and receivables. They appear under hospitality, senior living, and owner-occupied property because those are the classes where an operating business sits inside the real estate, and the lender’s lien may reach further than the owner expects.
Where to start, by asset
The grid shows who lends. These paragraphs say where to begin, because the first door matters.
For a one-to-four unit rental, start by deciding which lending world you are in: conventional if you want the lowest rate and will hold title personally, a portfolio bank if you are past the conventional property cap, DSCR if you want LLC title and scale. The one-to-four unit page walks the choice, and the single most consequential thing on the whole grid is that the fifth unit moves you to the next column.
For multifamily of five or more units, start with the agencies. Quote both Fannie and Freddie on every stabilized deal, because they do not price or accept the same property the same way. For a very long hold, HUD 223(f) removes the balloon. For construction, 221(d)(4) is the only loan with no takeout. Banks and bridge lenders are for the deals the agencies will not take yet.
For core commercial and net lease, the tenant credit decides the lender. Strong credit and a long lease open life companies and CMBS; anything with a wrinkle goes to a bank or, if transitional, a bridge lender. The estoppels and SNDAs matter more here than anywhere else.
For hospitality and senior living, the property is a business, and the lender underwrites it as one. Owner-operators should look at the SBA programs first under the short-stay rules; larger flagged hotels go to CMBS and banks; senior housing has its own agency and HUD executions. Either way, expect the lender to underwrite operations, not just the building.
For self-storage, the class has gone institutional, so banks, CMBS, and life companies all compete for stabilized facilities, with bridge debt for lease-up.
For land and construction, there is no cheap money, because the risk comes before the asset. Raw land is bank, seller, and private capital at low leverage. Construction is bank debt or bridge capital, HUD 221(d)(4) for multifamily, and C-PACE for the efficiency component, and every one of those loans is built around the construction-to-permanent gap.
For owner-occupied property, start with the SBA, which exists for exactly this borrower, and compare against a bank. Build the real estate entity and the operating entity as the matched pair the lender requires before you apply, because the structure decides eligibility.
The grid is a map, not a referral. Which door is right depends on the deal in front of you, and the pages behind every cell are where the reasoning lives.