How does an assumable senior plus seller second blend on a CRE acquisition?

When the assumable + seller second math wins and the senior consent process

A loan assumption can preserve the existing loan terms if the lender approves it. Compare those terms, the assumed balance, fees and any permitted seller financing with the cost and obligations of a new loan.

Example: $30M acquisition, $20M assumable senior at 4.5% (originated 2021), $5M seller second at 7.5%, $5M sponsor equity. Blended debt cost: ($20M × 4.5% + $5M × 7.5%) / $25M = 5.1%. Vs. all-new debt at $25M / 6.5% = 6.5%. Savings: 140 bps × $25M = $350K per year, or ~$1.75M over a 5-year hold.

Lender bench for assumable seniors: HUD 232 LEAN and HUD 223(f) loans are fully assumable subject to lender approval, GNMA approval, and HUD approval. Most agency multifamily loans (Fannie DUS, Freddie Optigo) are conditionally assumable subject to lender approval and underwriting of the new borrower. Many older life-co loans permit assumption at lender discretion. Bank loans rarely permit assumption.

Senior assumption process: typically 60 to 120 days. Buyer must underwrite to the senior's credit tests (DSCR, net worth / liquidity). Senior charges an assumption fee (typically 1.0% to 2.0% of the loan balance). Senior may modify rate or other terms in exchange for assumption (sponsor must negotiate this in advance, 'as-is' assumption is the goal).

Seller second + senior subordination: the senior must consent to the seller second and execute a subordination agreement. Senior typically caps the seller second at a defined CLTV (75% to 80%) and imposes the standard subordination terms. This adds 30 to 60 days to the assumption process and requires counsel coordination.