Three main institutional commercial mortgage programs in 2026. CMBS (Commercial Mortgage-Backed Securities): 65–75% LTV, 6.5–8% rate, 10-yr balloon with 25–30 yr amortization, non-recourse, expensive defeasance prepayment. Best for max-leverage retail/office/industrial $5M–$50M. Life-insurance company debt: 60–70% LTV, 6–7.5% rate (often cheapest), 5/7/10/15-yr flexible terms, partial recourse common, simpler yield-maintenance prepayment. Best for lower-leverage stronger-sponsor deals. Agency multifamily: Fannie DUS, Freddie Optigo SBL, FHA 223(f). 65–85% LTV, 6–7%, varied terms. Best for $1M+ multifamily acquisition/refinance — usually beats CMBS on rate by 50–100 bps.
Commercial mortgage programs are deeply segmented — the right product for a $5M Class-A multifamily acquisition is fundamentally different from a $20M Marriott CMBS refinance or a $15M industrial life-company permanent debt. This guide breaks down when each program wins and the trade-offs between them. For property-specific deep-dives see multifamily loan down payment, hotel financing, and self-storage financing.
Side-by-Side Comparison
| Dimension | CMBS | Life-Company | Agency Multifamily |
|---|---|---|---|
| Loan size | $3M–$200M+ | $10M–$300M+ | $1M–$200M+ |
| Rate (2026) | 6.5–8% | 6–7.5% | 6–7% |
| LTV max | 75% | 70% (typical) | 80%, FHA 85% |
| Term | 10-yr balloon | 5, 7, 10, 15-yr | 5, 7, 10, 12, 15-yr; FHA 35-yr |
| Amortization | 25–30 yr | 25–30 yr | 25–30 yr; FHA fully amort |
| Recourse | Non-recourse | Partial / non-recourse | Non-recourse w/ standard carve-outs |
| Prepayment | Defeasance / YM | Yield maintenance | YM then step-down |
| Close time | 60–90 days | 60–120 days | 45–75 days; FHA 6–9 mo |
| Best property types | Retail, office, industrial, hotel | All except hotel; stronger sponsors | Multifamily only (Fannie/Freddie/FHA) |
When CMBS Wins
- Non-multifamily commercial at max leverage (70–75% LTV) on stabilized properties
- Hold-to-maturity strategy — you intend to sell or refinance at the 10-yr balloon, so expensive prepayment doesn't hurt
- Need non-recourse debt without the constraints of life-company underwriting
- Top originators: JPMorgan, Wells Fargo, Deutsche Bank, Citi, Morgan Stanley, Goldman Sachs, Bank of America
When Life-Company Wins
- Lower-leverage deals (60–65% LTV) — life-companies price these below CMBS
- Strong-sponsor borrowers with track record + balance sheet
- Need flexible term — 5, 7, 15-yr options vs CMBS' rigid 10-yr
- May refinance early — yield maintenance simpler than CMBS defeasance
- Top life-companies: Prudential, MetLife, New York Life, Northwestern Mutual, TIAA, Principal, Pacific Life, Mass Mutual, Voya
When Agency (Fannie/Freddie/FHA) Wins for Multifamily
- Multifamily acquisition or refinance — agencies have funding cost advantage of 50–100 bps over CMBS for multifamily
- Fannie DUS: $1M+, 65–80% LTV, 5/7/10/12/15-yr, ~6–7%, partial recourse on standard structure
- Freddie Optigo Conventional: $1M+, similar terms to Fannie DUS
- Freddie SBL (Small Balance Loan): $1M–$7.5M, 80% LTV, ~6–7%, non-recourse, no environmental on under $5M — often best on smaller multifamily
- FHA 223(f): 85% LTV, 35-yr fully amortizing, ~6–7%, fully assumable. 6–9 month close.
- Top agency originators: Walker & Dunlop, Berkadia, CBRE Capital, JLL, Greystone, Newmark, Hunt Capital Partners
Decision Shortcut
- Multifamily $1M–$7.5M: Freddie SBL first.
- Multifamily $5M+: Fannie DUS or Freddie Optigo Conventional.
- Multifamily refi with long-term hold: FHA 223(f) for 35-yr fully amort.
- Office/retail/industrial at max leverage: CMBS.
- Office/retail/industrial moderate leverage, strong sponsor: Life-company.
- Hotel: CMBS at $5M+, SBA 504 under $5.5M. See hotel financing.
Next Step
Get matched with CRE lenders across CMBS, life-company, and agency multifamily. See also multifamily loan down payment, hotel financing, and self-storage financing.
What each lender prioritizes
Beyond the rate, the three sources differ in what they care about most, and that often decides the deal. CMBS lenders are property-first — they will push leverage to 70–75% on a stabilized asset and tolerate a thinner borrower so long as the building cash-flows, but the loan is securitized, so servicing and prepayment are rigid. Life-company lenders are the most conservative and relationship-driven, rewarding lower leverage and strong sponsors with the sharpest long-term fixed rates. Agency lenders (Fannie, Freddie, FHA) exist for multifamily and bring a funding-cost advantage plus non-recourse terms that are hard to beat on apartments. Match the source to the property type and your leverage and flexibility needs before chasing the headline rate.
Frequently Asked Questions
What is the difference between CMBS, life-company, and agency debt?
CMBS is securitized, property-first lending at higher leverage; life-company loans are conservative, relationship-driven, lowest-rate financing at lower leverage; and agency debt (Fannie/Freddie/FHA) is multifamily-only with a funding-cost advantage and non-recourse terms.
Which CRE loan has the lowest rate?
For lower-leverage deals with strong sponsors, life-company loans often price the sharpest long-term fixed rates. For multifamily, agency debt is usually hard to beat. CMBS competes on leverage and flexibility more than on the headline rate.
What is best for multifamily financing?
Agency debt — Freddie Mac SBL for roughly $1M–$7.5M and Fannie DUS or Freddie for $5M+ — usually wins on multifamily thanks to a funding-cost advantage and non-recourse terms.
Is CMBS or a life-company loan more flexible?
Neither is especially flexible, but life-company loans, held on balance sheet, can be more accommodating than securitized CMBS, which has rigid servicing and prepayment (often defeasance). Match the structure to how long you will hold.
Frequently Asked Questions
What's the difference between CMBS and life-company debt?
CMBS (Commercial Mortgage-Backed Securities) loans are originated by banks and securitized into bond pools sold to investors. Standard terms: 65–75% LTV, 6.5–8% rate, 10-yr balloon with 25–30 yr amortization, non-recourse, expensive prepayment (defeasance). Life-company debt is held on the insurance company's balance sheet rather than securitized. Standard terms: 60–70% LTV, 6–7.5% rate (often cheapest on stronger sponsors), 5/7/10/15-yr terms, partial recourse common, more flexible prepayment. Life-companies prefer stronger sponsors and lower-leverage deals.
What is agency debt for multifamily?
Agency debt = Fannie Mae and Freddie Mac multifamily mortgages, plus FHA/HUD programs. Fannie Mae DUS (Delegated Underwriting and Servicing) is the standard multifamily product for $1M+ loans, 65–80% LTV, ~6–7% rate, 5/7/10/12/15-yr terms, partial recourse. Freddie Mac Optigo is the Fannie equivalent with similar terms. FHA 223(f) for multifamily refinance/acquisition: 85% LTV, 35-yr fully amortizing, 6–7%, fully assumable, but 6–9 month close.
Which is cheapest for a $5M apartment building?
Depends on sponsor. For stabilized $5M multifamily: Freddie SBL (Small Balance Loan) often best at $1M–$7.5M — 80% LTV, ~6–7% rate, non-recourse, no environmental requirement on smaller deals. Fannie DUS close second. Life-company may match if sponsor is strong and willing to accept partial recourse. CMBS usually beat on rate by 50–100 bps for multifamily because agencies have funding cost advantage.
Which is best for retail / office / industrial?
CMBS is the default for non-multifamily commercial. Office, retail, industrial, hospitality at 65–75% LTV $5M–$50M typically go CMBS for non-recourse + max leverage. Life-company wins on lower-leverage (under 65% LTV) deals with strong sponsors who want partial or no recourse and flexible prepayment. Conventional bank wins on $1M–$5M deals or sponsors with existing bank relationships.
What's the prepayment penalty difference?
CMBS: Defeasance (replacing the property collateral with Treasuries) or yield maintenance. Expensive — $50K–$500K+ to exit early. Life-company: Yield maintenance typical, simpler than CMBS defeasance. Fannie/Freddie: Yield maintenance during locked period, then step-down (e.g., 5-4-3-2-1%) in later years. FHA: Step-down prepay over first 5–10 years. Bank conventional: Often simple 3-5% declining or no penalty after year 3.