Life Insurance Company Loans: Long-Term CRE Financing (U.S.)

Life insurance companies offer commercial real estate loans with long terms, low rates, and conservative underwriting. These loans are best for high-quality, investment-grade properties in major markets.

Why Choose a Life Insurance Company Loan?

• Long-Term Fixed Rates: 5–30 year terms, often fixed for the duration.
• Low Interest Rates: Among the lowest for long-term CRE loans.
• Non-Recourse and Assumable: Protects personal assets and allows loan transfer.
• Large Loan Amounts: No official upper limit; minimums often $1–2 million.

Loan Highlights

• Eligible Properties: Multifamily, office, industrial, retail, hotel, self-storage, medical, mixed-use (Class A, newer, in major markets)
• Loan Amount Range: Minimum $1–2 million, no set maximum
• Interest Rate: Fixed, varies by lender and market
• Loan Term: 5 to 30 years
• Amortization: Up to 30 years
• Maximum LTV: Up to 70% (often lower)
• Minimum DSCR: 1.25–1.35x
• Minimum Debt Yield: 8–10%
• Recourse: Can be non-recourse, limited, or full recourse
• Prepayment: Yield maintenance, break funding, or step-down penalty

Advantages

• Low, Fixed Rates: Predictable payments for up to 30 years
• Non-Recourse: Limits personal liability
• Assumable: Can transfer to a new owner
• Large Loan Sizes: Suitable for major projects

Disadvantages

• Strict Underwriting: Only top-tier, newer properties qualify
• Conservative LTV/DSCR: Lower leverage than other loan types
• Prepayment Penalties: Often significant for early payoff
• Not for Distressed/Value-Add: Only stabilized, investment-grade assets

Eligibility & Property Types

Life insurance loans are available for:

• Class A multifamily, office, retail, industrial, hotel, self-storage, medical, and mixed-use properties in major markets

Borrower requirements:

• Strong financials and experience
• Properties must be stabilized and investment-grade
• Typically in primary or strong secondary markets

Frequently Asked Questions

What is a life insurance company loan?

A commercial real estate loan underwritten by a life insurance company, usually for top-tier, stabilized properties.

What are the main benefits?

Long-term, low-rate, non-recourse, and large loan amounts.

What are the downsides?

Strict property and borrower requirements, lower leverage, and prepayment penalties.

How much can I borrow?

Minimum $1–2 million, no set maximum.

What properties qualify?

Class A, newer, stabilized properties in major markets.

Real Stories

“A life insurance loan let us lock in a 25-year fixed rate for our downtown office building. The process was selective, but the terms were unbeatable.”
— CRE Investor, New York

Ready to Take the Next Step?

Glossary

• Life Insurance Company Loan: CRE loan underwritten by a life insurer.
• Non-Recourse: Lender cannot pursue personal assets. Learn more
• Yield Maintenance: Prepayment penalty to protect lender’s yield. Learn more