more-arw search

Q&A Forum

Where can I find an product for commercial mortgages, similar to PMI on home mortgages?

If a bank asks for 25% equity on a $3,000,000 loan and we want to put down 10%, is there a product that will guarantee payment to the lender for the other 15% in case of a default??

If so, who offers such a product?


Topic Expert
Joseph Ori
Title: CEO
Company: Paramount Capital Corporation
(CEO, Paramount Capital Corporation) |

Yes, its usually a letter of credit, however, you must have great credit and a good banking relationship. The only other way to cover the equity shortfall is a second lien loan, although, they are also difficult to arrange.

(President) |

Thank you!

Topic Expert
Gabe Burke
Title: Corporate Real Estate Specialist
Company: Cushman & Wakefield (formerly DTZ)
LinkedIn Profile
(Corporate Real Estate Specialist, Cushman & Wakefield (formerly DTZ)) |

There is commercial mortgage insurance available but the type you need depends on whether your commercial property is owner-occupied or an investment property. If your business occupies 51% then you are considered owner occupied. Which one are you?

Mike Hallmann
Title: President
Company: Lantern Associates
(President, Lantern Associates) |

This property will be owner occupied

Jeffrey McCandless
Title: Managing Partner
Company: Stone Harbour Partners
(Managing Partner, Stone Harbour Partners) |

I'd strongly suggest looking at an SBA commercial mortgage loan. This product gets you the desired LTV position and provides a bona fide guarantee to the lender. This sounds like a typical SBA transaction that fits well into this product. I've had many clients who swear by the product.

(President) |

Thanks, but we are a non profit and as such can't qualify for SBA- Sorry I didn't describe our situation more clearly, but I certainly appreciate your assistance!!


Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email [email protected] to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.