Capital markets
Six sources, and they are not interchangeable
The same building gets six different answers, and the differences are structural rather than a matter of pricing. Term, recourse, prepayment and speed all move together, and matching the source to the plan is most of the work a broker does.
No lender, fund, bank, agency or CDC is named anywhere on this site, and none is a partner of anything. These are descriptions of how the market is structured, not relationships.
Balance sheet
A bank or fund lends its own money and holds the note. Because nobody has to be satisfied downstream, the structure is negotiable: an odd property, a partial recourse arrangement, a covenant that fits the business.
- Term
- Usually 5 or 7 years
- Recourse
- Commonly full or partial
- Prepayment
- Step-down, sometimes open
- Speed
- Fastest to a real answer
Anything with a story that needs telling.
Agency multifamily
Government-sponsored enterprise programmes for multifamily. Long terms, non-recourse, competitive pricing, and a box that is genuinely a box — inside it the execution is excellent, outside it there is no discussion.
- Term
- 5 to 15 years
- Recourse
- Non-recourse with carve-outs
- Prepayment
- Yield maintenance
- Speed
- Deliberate
Stabilised apartments that fit the programme without argument.
Conduit / securitisation
Fixed-rate, non-recourse, ten-year debt priced off the credit markets rather than a branch. The trade is flexibility: once the loan is in a pool, nobody can amend it, and the exit is defeasance.
- Term
- Typically 10 years
- Recourse
- Non-recourse with carve-outs
- Prepayment
- Defeasance or yield maintenance
- Speed
- Process-driven
Stabilised, well-leased assets a sponsor intends to hold for the full term.
Credit union
Member-owned institutions lending in their own footprint. Often the best answer on smaller owner-occupied and small-balance investment property, and frequently more patient than the alternatives.
- Term
- 5 to 10 years
- Recourse
- Usually full
- Prepayment
- Step-down or open
- Speed
- Varies by institution
Owner-occupied and small-balance deals inside their region.
Debt fund
Private capital lending against a business plan rather than trailing income. Faster and dearer, sized on cost, and comfortable with a property that is not yet what it will be.
- Term
- 12 to 36 months
- Recourse
- Partial, with completion guarantees
- Prepayment
- Minimum interest period
- Speed
- Fast
Value-add, lease-up, construction and anything on a clock.
SBA lender and CDC
A conventional first mortgage from a bank alongside a debenture from a Certified Development Company with an SBA guarantee behind it. More parties, more paperwork, and a materially smaller equity injection.
- Term
- Up to 25 years on real estate
- Recourse
- Always — 20% owners guarantee
- Prepayment
- Declining on the debenture
- Speed
- Slowest of the six
An operating business buying the building it occupies.
The trade nobody explains
Every step toward cheaper, longer, non-recourse debt is a step away from being able to change your mind. A balance-sheet lender can amend a loan over a phone call. Nobody can amend a securitised loan, because the loan belongs to a trust and the trust has no phone.
So the question is not which source has the best rate. It is how long you intend to hold the asset, how likely the plan is to change, and what it would cost you to get out early if it does. Answer those three and the source usually picks itself.
A ten-year conduit loan at an excellent rate is an expensive mistake on a property you will sell in year four. The rate was never the point.