Permanent financing is long-dated commercial mortgage debt placed on a stabilized property. Typical terms: 5/7/10/15-year fixed rate, 25- to 30-year amortization , 60% to 75% LTV, non-recourse with carve-outs . Sources include Fannie/Freddie/HUD agency, life insurance companies, CMBS conduits, and bank permanent debt.
What qualifies a property for permanent financing?
Stabilization. The property must have a documented operating history (typically 12+ months at stabilized occupancy), strong physical condition, a credible operating budget, and acceptable rollover risk over the loan term.
Cash flow. Debt yield, DSCR, and LTV all need to satisfy the lender's sizing tests at the loan amount the borrower wants. Permanent lenders are sizing-conservative because they hold the loan for 5 to 10 years.
Which permanent source matches which property?
For stabilized multifamily, compare applicable agency programs with bank, life-company and other alternatives. Fit depends on the property, sponsor, loan size, timing and ownership plan.
Industrial, retail with credit tenants, self-storage, hotel: CMBS or life co. Life co for the lower-leverage, longest-dated, highest-quality assets; CMBS for the broader middle of the market.
Office: tougher in 2026. Life cos and banks are selective. CMBS still active for credit-tenant or trophy office.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Financial Stability Report · Board of Governors of the Federal Reserve System · 2025-11