Simplified

It seems like CommercialBanc is getting more and more requests for stated income commercial real estate loans. Talking with the commercial loan specialists and select underwriters, it seems that the majority of requests are coming from business owners or investors that have filed tax returns but are not showing much income due to effective tax planning and accounting - compared with borrowers that haven’t filed tax returns.

For borrowers that haven’t filed tax returns, a stated income commercial loan option is generally the only choice when applying for a commercial mortgage.

However, for borrowers that can provide tax returns, a stated income option is generally not required, at least for investor - income producing - commercial real estate properties.

When underwriting commercial mortgage loans, the income required to service the debt is generated from the commercial property, not the borrower. Therefore, the subject property’s cash flow is the source of repayment for the commercial mortgage, not the income shown on the borrowers tax returns.

While this is a brief and very general analysis, the point is that don’t automatically assume you need a stated income commercial loan just because you have effective personal tax planning strategies.

Contact a CommercialBanc Commercial Loan Specialist for further information on stated and traditional commercial loans and apartment loans.