What do credit unions execute well?
Owner-occupied CRE for member businesses (medical, professional offices, light industrial, single-tenant retail) and small-balance investor CRE for member sponsors with operating accounts at the credit union. Loan sizes typically run $500K to $30M, with member business lending caps governed by NCUA rules at the federal level and by state rules for state-chartered credit unions.
Where credit unions are less competitive
Pure non-recourse perm at scale (life cos and CMBS dominate). Construction above $10M (most credit unions cap construction tightly). Out-of-area deals where the borrower is not a member and there is no path to a deposit relationship. Multifamily perm above the SBL bracket, where agencies price tighter.
Most credit unions also avoid hospitality, gas stations with environmental risk, and any asset class with concentrated single-tenant credit risk that exceeds member business loan concentration limits.
Member business loan caps and what they mean
Federal credit unions are subject to a member business loan (MBL) cap of 1.75 times net worth or 12.25% of assets, whichever is less, with carve-outs for loans under $50,000 and for loans secured by 1- to 4-family residential real estate. State-chartered credit unions follow state law, which can be more permissive.
What this means at the deal level: large credit unions with strong capital can write meaningful CRE balance sheets, but a single sponsor concentration is harder than at a community bank. Sponsors needing a $25M+ commitment from one credit union should expect a participation structure with two or three credit unions on the loan.
Process and timeline
30 to 60 days from term sheet to close on a stabilized perm; 45 to 90 days on owner-occupied with SBA companion debt. Internal credit committee meets weekly or biweekly at most credit unions; member business lending committees often have published meeting calendars.
Most credit unions are not on standard CMBS or agency document templates; loan documents follow the credit union's in-house form, generally simpler than CMBS but less negotiated than life-co perm. Plan for borrower counsel to redline standard intercreditor and reserve language rather than the full loan agreement.
Decision-maker access
Decision-makers are the chief lending officer and the member business lending team, not a syndicate desk. Direct access is the norm; sponsors with multiple closed deals at one credit union typically reach the decision-maker by phone within a day on new opportunities.
Strong sponsor packages still matter. Credit-union credit committees are conservative by mandate and look closely at sponsor liquidity, debt service coverage at the loan rate (not pro forma), and operating-account history. A clean bank-statement record materially improves pricing and structure.
Frequently asked questions
Can a non-member close a credit union loan?
Generally no for institutional CRE. Sponsors must establish membership, which usually requires a small share deposit and is open by employer, geography, or association membership, before a loan closes.
Do credit unions write non-recourse?
Most credit-union CRE loans carry full or partial recourse. A handful of larger credit unions write non-recourse on stabilized lower-leverage requests, typically with a deposit relationship and full personal financial disclosure.
How does CRE concentration regulation affect credit-union appetite?
NCUA examiners watch CRE concentrations closely, and credit unions above 300% of net worth in CRE face heightened supervisory attention. Expect tighter credit boxes and lower hold limits at credit unions running close to that threshold.
Sources
- Quarterly Banking Profile · Federal Deposit Insurance Corporation · 2026-Q1
- Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) · Board of Governors of the Federal Reserve System · 2026-Q1
- Semiannual Risk Perspective · Office of the Comptroller of the Currency · 2025-12