A commitment is a binding lender approval issued after credit committee , locking the loan economic terms (subject to closing conditions) and authorizing legal documentation and closing. It supersedes the term sheet. Lender's counsel drafts the loan documents from the commitment. Borrower's counsel reviews and negotiates them.
What changes between term sheet and commitment?
Most economic terms should hold. Common changes: refined proceeds based on appraisal; revised reserves based on engineering; clarified prepayment and extension language; finalized recourse and carve-outs. Material adverse changes, proceeds cut by more than a few percent, rate increased, structure tightened, give the borrower legitimate grounds to walk.
What conditions remain?
Standard conditions to closing: clear title, satisfactory survey, executed leases as represented, satisfactory insurance, completed third-party reports without unresolved items, executed loan documents, opinion of borrower's counsel, and the borrower's certifications. Special conditions vary deal by deal.
How long until closing after commitment?
Typically 2 to 4 weeks from commitment to closing on perm debt; 1 to 3 weeks on bridge. The PACE depends on document negotiation, title curative timing, and any open third-party items. Lenders vary widely in document turnaround; this is something to ask before signing the term sheet.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Multifamily Market Commentary · Fannie Mae Economic & Strategic Research · 2026-Q1