What is a commercial real estate loan?

A commercial real estate (CRE) loan is a mortgage secured by income-producing or business-use property — such as office buildings, retail centers, multifamily apartments (5+ units), warehouses, hotels, and mixed-use properties. Unlike residential mortgages, commercial loans are primarily underwritten based on the property's income-generating ability rather than the borrower's personal income. Key metrics include debt service coverage ratio (DSCR), net operating income (NOI), and loan-to-value (LTV). Commercial loan terms are typically shorter than residential (5–20 years with amortization up to 25–30 years), and rates are generally higher.