Nonrecourse Commercial Loans






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Loan Amount
Minimum $1,000.000


Type of Property
We do not finance individual mobile homes or SFRs

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Nonrecourse Commercial Loans over $1,000,000

Commercial real estate investors often face challenges in sourcing high-quality loans that align with their unique investment strategies. At The Madison Group, we work on your behalf to arrange alternative loan options from the nation’s top lenders, ensuring you secure the optimal financing for your long-term investment goals.

The Madison Group partners with a diverse network of lenders, including commercial banks, life insurance companies, CMBS providers, Fannie Mae, and Freddie Mac. These strong relationships enable us to offer a broad range of nonrecourse loan products with competitive rates and terms. Our clients benefit from flexible financing solutions that help preserve working capital while meeting their investment objectives. A nonrecourse loan may be the ideal financing structure for your commercial real estate needs.


What is a Nonrecourse Loan?

A nonrecourse loan is a mortgage agreement in which the collateral securing the loan is the sole source of repayment. In the event of a default, the lender can only seize and sell the property securing the loan and cannot pursue the borrower or guarantor for additional assets, subject to carve-out guarantees. This type of financing is typically used for longer-term, permanent commercial real estate loans placed on stabilized and performing assets.


Advantages and Considerations of Nonrecourse Loans

Pros:

  • No Personal Liability: The borrower is not personally liable for the loan (except in cases of "bad boy carve-outs").
  • Longer Amortizations & Terms: Typically offers more favorable loan terms and extended amortization periods.
  • High Loan-to-Value (LTV): Nonrecourse loans can offer higher LTV ratios, maximizing leverage.
  • Certainty of Closing: Greater clarity and security throughout the loan process.
  • Assumable Loans: Nonrecourse loans are often assumable, allowing for transfer to new owners without additional liability.
  • No Personal Asset Risk: The lender cannot seize non-pledged personal assets or properties.
  • Reserves for Tenant Improvements (TI) & Leasing Commissions (LC): Typically included in the loan structure.

Cons:

  • Higher Closing Costs: Nonrecourse loans may incur higher closing costs due to the additional protections and complexity.
  • Defeasance or Yield Maintenance: Prepayment penalties, such as defeasance or yield maintenance, may apply.
  • Limited Lender Availability: Nonrecourse loans are typically available only through select commercial lenders.
  • Escrow & Impound Accounts: Escrow accounts for taxes and insurance may be required.

Eligible Property Types for Nonrecourse Loans

Nonrecourse commercial loans are available for a wide range of property types, including:

  • Shopping Centers
  • Medical office buildings
  • Office buildings
  • Retail centers
  • Industrial and warehouse properties
  • Self-storage facilities
  • Multi-family properties
  • Flagged hotels

These loans can be used for acquisition or refinancing of commercial real estate assets.


Why Choose The Madison Group?

At The Madison Group, we offer a comprehensive range of nonrecourse commercial real estate loans to suit both investor and owner-user properties. Our expertise and access to top-tier lenders ensure you receive the most suitable financing terms available for your real estate investments. By partnering with us, you gain access to competitive rates, flexible loan structures, and expert guidance, helping you make informed decisions that align with your long-term financial goals.


General Nonrecourse Lending Parameters

Loan Limits Minimum of $1,000,000 for Fannie/Freddie | Minimum $3,000,000 for CMBS
Rates Competitive fixed rates
Terms 5, 7, and 10 years (up to 30 years with Fannie/Freddie)
Amortization 25 to 35-years
Prepayment Typically, Defeasance or Yield Maintenance
Recourse Non-recourse options available (subject to standard carve-outs)
DSC Minimum 1.20 DSC
LTV Up to 80% LTV/LTC
Assumable Yes, to a qualified borrower.
Property types Multifamily, mobile home communities, retail, office, industrial, self-storage, hospitality, Industrial, single tenant, credit tenant, and more.
Geographic areas Available in most states across the U.S.

How You Benefit from Working with The Madison Group:

  • Increase Cash Flow: Benefit from tailored financing solutions designed to maximize your cash flow.
  • Save Time: Let TMG source the best rates and terms, allowing you to focus on your investment strategy.
  • Avoid Pitfalls: Our in-depth analysis ensures you avoid costly surprises and make informed decisions.
  • Access Multiple Lenders: Receive financing offers from a variety of top lenders, giving you access to diverse loan programs.
  • Expert Guidance: Our experienced team of commercial real estate lending professionals is with you every step of the way.

By partnering with The Madison Group, you gain access to the expertise, resources, and support necessary to secure the best financing solutions for your office building investment.



Call us today!
  435-785-8350