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Small-Balance Commercial Mortgages for Non-Profits

Commercial Mortgage
Posted on 
September 26, 2017

It’s not unusual for commercial mortgage brokers to come across non-profit organizations in need of financing. While it can be challenging for these organizations to obtain funding from traditional sources like local banks or credit unions, there are small-balance commercial mortgage lenders who can provide mortgages to non-profits.

Here’s what brokers should know about the non-profit organization when they submit a commercial mortgage request:

The collateral:

One of the first things of which you need to get a sense is the property that the non-profit is pledging as collateral. Your lender will need to know where the building is located, the size of the property, the type of non-profit being run from the building and how many members the organization has. If there are additional tenants operating from the property, provide a rent roll.

The ownership structure of the organization:

In order to properly evaluate your borrowers’ non-profit mortgage request, your lender will need information about how the organization’s ownership is structured, so it’s important to submit the by-laws. This information is necessary because the structure can dictate whether or not guarantees will be required.

The organization’s financial situation:

A small-balance commercial mortgage lender will want to be sure that a borrower’s finances are in order and that they’re capable of making monthly payments. Non-profit organizations are no exception. Consult with your lender about the documents they will require to evaluate the organization’s finances and provide them with your initial submission.

Use of proceeds:

For lenders, knowing how a borrower is planning to use the funds is important. Make sure to provide a detailed explanation in the loan submission summary for the non-profit’s commercial mortgage request.

Developing an understanding of the non-profit, their financial situation, the property being pledged as collateral and how the organization plans to use the mortgage are all crucial pieces of information that brokers need to consider when submitting a deal. Once you have all of the above, you’ll be able to put together a better commercial mortgage request, which means a better chance of getting the non-profit the money they need.


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