CMBS Definition

CMBS (Commercial Mortgage Backed Securities) are backed by loans secured with commercial rather than residential property. The Commercial Mortgage Backed Security market provides liquidity and diversification to commercial real estate investors and ready access to capital for commercial lenders. For more information, visit the Commercial Mortgage Securities Association.

This is important to understand because many lenders underwrite their loans to these guidelines. If their loans don't conform to the industry, then they can't be sold on the open market.

So if you're wondering why your local bank can't give you 100% loan on your office building in downtown Chicago, is because the bank won't be able to sell that loan on the open market! If you undertsand what the lenders' needs are, you will be better equipped to get loans for your commercial properties.

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