Commercial Loan Modification - Keys to Success

Applying for a Commercial Mortgage Loan Modification sometimes requires quite a bit of paper work. Commercial Mortgage Loan Modification success or failure depends greatly on the current NOI, Borrower Strength and Vacancy rate. You would do well to have your ducks in a row. To simplify the process, we've compiled a list of items you'll need to the lender or broker who is assisting you.

Depending upon your circumstances, you may need to bring additional documents.

• Current rent roll
• Historical Rent Roll (2yrs if you have it)
• Current Income and Expense Report
• Current Mortgage Statement
• Updated PFS (Personal Financial Statement)
• Tenant profiles describing the larger tenants

Commercial Modification is based on the property type, current cash flow, vacancy rate and borrower strength. For example if you have an apartment building that was 98% occupied in 2007 and 2008 but now is at 89% the modification would be targeted to work within the adjusted NOI (net operating income).

If you had an Office or Retail building those factors plus the strength of the tenants and their leases would be considered. If you had a known tenant (credit tenant) and a few more units to spread the risk with the credit tenant having a longer term lease the Commercial Loan Modification would be easier to negotiate.

In a Commercial Modification negotiation you want to present as strong a case as possible that both you and the property are still a good bet and that helping you weather the current economic conditions would be a better strategy than letting the loan go all together.