Jun 16, 2023 7 Min read
Agency and non-agency loans are two distinct categories of financing options available to commercial real estate investors. While agency loans are backed by government entities, non-agency loans are provided through private lenders. Understanding the difference between these loan types is crucial for investors seeking to finance their commercial real estate ventures. This blog will dive into the characteristics of agency and non-agency loans, explore their contrasting features and shed light on how they apply to commercial real estate investing.
Agency loans, also known as government loans, are loans that are issued or guaranteed by government agencies. These agencies include Fannie Mae, Freddie Mac, the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA). Agency loans primarily focus on residential mortgages, but some agencies, like the Small Business Administration (SBA), offer loan programs for small businesses involved in commercial real estate.
Non-agency loans, in contrast, are not backed by government entities and are provided by private lenders. These lenders include banks, credit unions and non-bank financial institutions. Non-agency loans offer more flexibility in terms of loan amounts, borrower qualifications and property types. They cater to a broader range of commercial real estate investors and projects.
When considering commercial real estate investments, investors should carefully evaluate the implications of agency and non-agency loans:
Working with a strong and experienced financial partner such as Terrydale Capital can help investors navigate the intricacies between the types of financing programs and discern which avenue is the most suitable.
Agency loans and non-agency loans offer distinct advantages and considerations for commercial real estate investors. Agency loans provide stability, favorable terms and specific borrower eligibility - primarily in the residential sector. Non-agency loans offer flexibility, customization and broader property type coverage. Selecting the most suitable loan option depends on factors such as investment goals, property type, borrower profile and risk tolerance.
Terrydale Capital is the perfect choice of financial partner to help guide investors in making the best decisions for their investment success. Visit Terrydale Live today where you not only have access to our entire team, but have the commercial real estate market at your fingertips with active opportunities and live rates.
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Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
