NNN Loan, Credit Tenant Financing 

 

NNN loans and credit tenant financing is making a serious "comeback".  A few select lenders are becoming more and more aggressive and are offering long term fixed rate commercial mortgages.  For example, 10 to 20 year fixed, with 20 - 25 year amortization schedules is currently available. 

If you are in the process of refinancing or acquiring either a credit tenant or non credit tenant nnn property, with a minimum loan amount of $500,000 and max of $20,000,000, we want to work with you. 

Here are some of the highlights to our programs:

• Tenant(s) does not have to be rated.
• Limited to no recourse for borrowers/sponsors
• Fixed rates from 10 to 20 years
• Effective interest rates are currently at or below 6.% for non credit tenants and below for credit tenant properties. 
• Loan to value up to 75% for non credit tenants and 90% for rated tenants.
• Debt Coverage Ratios as low as 1.05 

These nnn loan loan programs are geared for borrowers that have a long term hold strategy.  If you believe you may want to sell the property in a few years, you may have a conflict as the pre payment penalites are more expensive than with other commercial bank financing.  Pre payment penalties range from Yield  Maintiance through out the duration of the fixed period, to 5% for 5 years on the lower end.  However, assumption clauses can be permitted/negotiated.   Also borrowers enjoy having reduced to non recourse financing with these programs. 

Contact us today regarding your NNN loan or credit tenant financing request today.  For more meaningful answer, please fill out or pre approval form below. 

NNN Lenders

LTV

Loan to value, meaning the value of the property versus the loan amount, seldom exceed 75% for non credit loan requests.  However, for AAA rated tenants, 90% financing is available.    

DSCR

Debt Service Coverage Ratio restrictions are typically capped at a relatively low 1.20.  Meaning that for every $1.10 of net income the property produces the mortgage payment will not exceed $1.00.  Said in another way, after all expenses and mortgage has been paid, the owner needs to net at least $.10 to qualify.

Exceptions can be made with this as well.  It is not unheard of for major drug store occupied properties to qualify for DSCR as low as 1.05.    

Tenant Evaluation

Much analysis goes into evaluating tenant’s strength.   Lenders scrutinize the tenant’s financial position, time left on the current lease and other relevant information.  The time remaining on the current lease is of particular concern.  Many banks/ lenders will not allow the fixed period of the loan to extend the remaining term of the lease.  Some traditional banks will not allow the loan amortization period to exceed the length of the lease.

Property Analysis

Market value and market rent will be evaluated and compared to the subject property.  Age, appearance, location, accessibility, and local market conditions, as well as other factors are considered. 

Credit Worthiness

The personal credit worthiness of the borrower will often be checked though not as much weight is put on this compared to other transactions, such as owner occupied deals.  For corporations, business performance and credit rating will be evaluated.

We offer some of the best NNN loan options in the market - fill out our mini commercial loan application form for more answers.