Requirements at a Glance
Lenders evaluate qualification across three independent boxes: the property fundamentals, the borrower and sponsorship profile, and the business plan or use of proceeds. A single failure in any box can derail a deal even when the other two are strong.
| Category | Requirement | Detail |
|---|---|---|
| Property | Asset class and quality | Class A or Class B+ only; multifamily, office, industrial, retail, and mixed-use in primary or strong secondary markets |
| Property | Stabilized occupancy | 90%+ physical occupancy for at least 90 days prior to application, with in-place leases supporting underwritten NOI |
| Property | Loan-to-value | 55% to 65% of stabilized appraised value; most life companies underwrite to 60% for standard approval |
| Property | Debt service coverage ratio | 1.30x minimum; most life companies target 1.40x to 1.50x on in-place NOI at the note rate |
| Property | Market classification | Primary market preferred; strong secondary markets considered with additional seasoning requirements and lower LTV |
| Property | Lease term and tenancy quality | Weighted average lease term (WALT) of 5+ years for office and retail; credit tenants materially improve proceeds and pricing |
| Borrower | Sponsor experience and track record | Institutional or institutionally-capable sponsor with documented ownership and management of comparable asset class and scale |
| Borrower | Audited financial statements | Two to three years of audited sponsor entity financials; personal financial statements for principals with 20%+ ownership |
| Borrower | Net worth and liquidity | Net worth equal to or exceeding loan amount; liquidity of 5% to 10% of loan amount post-close in unencumbered assets |
| Borrower | Clean legal and credit history | No bankruptcies, no material litigation, no prior loan defaults; life companies conduct deep background review on all principals |
| Business Plan | Hold strategy alignment | Borrower intent to hold for the full fixed term; prepayment is permitted but yield maintenance or defeasance costs can be substantial |
| Business Plan | Property management quality | Institutional property management in place or contractually committed; self-managed deals face heightened scrutiny |
| Documentation | Correspondent broker submission | Life company loans are typically submitted through a designated life company correspondent broker; direct submissions are rare and often not accepted |
Documentation You Will Need
Sponsors who arrive at term sheet stage with these documents in hand close 1 to 2 weeks faster than those who scramble during due diligence.
- Three years of property operating statements (P&L) and trailing 12-month rent roll
- Current rent roll with tenant names, lease start and expiration dates, base rent, and renewal options
- Two to three years of audited sponsor and guarantor entity financial statements
- Personal financial statement (PFS) for each principal with 20%+ ownership interest, dated within 90 days
- Schedule of real estate owned with current values, debt balances, and lender names
- Two to three years of personal and entity tax returns for all key principals
- Property appraisal ordered or approved by life company (MAI-certified, FIRREA-compliant)
- Phase I environmental site assessment, current within 12 months
- Property condition assessment (PCA) with capital reserve schedule
- Title commitment or title report current within 60 days
- Copies of all in-place leases including amendments and subordination, non-disturbance and attornment agreements
- Entity organizational documents (operating agreements, certificates of good standing) for borrowing entity
- Business plan or property narrative summarizing asset history, current operations, and hold strategy
- Insurance certificates meeting life company minimums for property, liability, and loss of rents
What Qualifies You
These are the factors that materially improve qualification odds and pricing.
Institutional-grade property in a primary market
Life companies allocate capital to assets that match their liability profile: durable, low-volatility income streams. A Class A multifamily or industrial property in Los Angeles, Chicago, or Dallas is structurally easier to place than the same property in a secondary market. Primary market assets command the tightest spreads and highest loan proceeds.
Conservative leverage well inside the LTV ceiling
Sponsors requesting 55% LTV on a 65% program max move through credit faster and with lower pricing than those at the ceiling. Life companies are not leverage-constrained lenders; they are yield and duration lenders. Bringing lower leverage signals financial strength and reduces required DSCR cushion.
Long-term, credit-quality tenancy
Leases with investment-grade or nationally recognized tenants materially increase life company appetite. A net-leased industrial property with a 12-year remaining term to an investment-grade tenant is a near-perfect life company collateral profile. WALT below 3 years is a structural challenge regardless of in-place occupancy.
Audited financials and institutional sponsor presentation
Life companies operate on actuarial underwriting cycles and expect borrowers to present like institutional counterparties. Sponsors with audited financials, organized entity structures, and experienced asset management teams move through the credit process faster. Informal or disorganized sponsor packages are a common cause of life company declines.
Correspondent broker relationship
Most life companies allocate capital through a network of designated correspondent brokers rather than direct origination. Working with an established correspondent who has an active allocation relationship with the target life company is the single most important process factor. An unknown sponsor submitted directly may never receive a quote.
Low deferred maintenance and institutional property management
Life companies underwrite for a 10 to 25 year hold horizon. Properties with deferred maintenance, aging mechanical systems, or below-market management in place face additional reserves, higher pricing, or declines. Institutionally managed assets with documented capital expenditure programs over the prior 5 years present as lower risk.
Strong in-place DSCR with limited rollover risk
A 1.50x DSCR at the note rate with no major lease expirations in the first 3 years of the loan is the ideal underwriting profile. Life company credit stress tests commonly apply a 10% to 15% NOI haircut and a rate stress; deals that remain comfortably above 1.25x under stress move through credit with minimal conditions.
What Disqualifies You
Common decline reasons that surface during underwriting. Most can be addressed with structuring or by routing the deal to a different program.
Transitional or value-add property
Life companies are permanent lenders for stabilized assets, not execution lenders for business plans. Any property with meaningful vacancy, near-term lease rollover, capital improvement programs, or repositioning underway will be declined. The property must be fully stabilized and generating its projected NOI at the time of application.
Loan size below program minimums
Most life companies have effective minimums of $10M, with some correspondent programs going as low as $5M. Deals below these thresholds are structurally uneconomic for life company execution given the diligence and documentation requirements. Below $5M, bank or insurance company conduit programs are more appropriate.
Tertiary or rural market location
Life companies generally do not finance assets in tertiary markets, rural submarkets, or markets without demonstrated institutional transaction volume. Liquidity of the underlying collateral over a 10 to 25 year term is a core underwriting consideration. Assets in markets without a deep institutional buyer pool will be declined regardless of in-place financials.
Non-institutional sponsor without audited financials
A sponsor who cannot provide audited financial statements, has no comparable institutional asset experience, or whose balance sheet does not support the loan amount will not qualify. Life companies do not make exceptions on sponsor quality because non-recourse structure concentrates lender risk on the collateral and borrower financial health.
Distressed financial history or active litigation
Any prior bankruptcy, commercial mortgage default, deed-in-lieu, or note sale in the sponsor's history is a near-universal decline at most life companies. Active material litigation against the borrowing entity or key principals is equally disqualifying. Life companies conduct thorough background and litigation searches on all principals prior to commitment.
Typical Qualified Borrower
If your situation matches one of these profiles, the program is likely a strong fit.
- Institutional multifamily owner seeking lowest-cost 10 to 25 year fixed-rate permanent financing on a stabilized Class A apartment community
- Net-lease industrial or office investor locking in long-term fixed rate debt against a credit-tenant lease with 10+ years remaining
- Family office or private equity sponsor with an institutional-quality retail or mixed-use asset seeking to match debt duration to long-term hold strategy
- REIT or private fund refinancing a stabilized asset off a bridge or construction loan at stabilization with full occupancy and audited entity financials
- Portfolio refinance sponsor consolidating multiple stabilized commercial properties under a single correspondent relationship at favorable blended pricing
- Experienced multifamily operator with 10+ years of institutional-grade asset management and a demonstrated track record in the target market
- Developer refinancing a completed and stabilized ground-up project with an institutional joint venture partner providing the balance sheet credibility required
Timeline
Life company loans typically close in 60 to 90 days from term sheet acceptance, reflecting the depth of actuarial-grade diligence required. Third-party reports including a life-company-approved appraisal, Phase I environmental, and property condition assessment run 3 to 5 weeks; legal documentation and borrower entity review add another 2 to 4 weeks. Sponsors who arrive with audited financials, complete lease abstracts, and organized entity documents cut 2 to 3 weeks off the cycle.
Frequently Asked Questions
What is the minimum loan size for a life company loan?
Most life companies have an effective minimum of $10M, with some correspondent programs accepting loans as low as $5M. Below $5M, the diligence and documentation requirements make life company execution uneconomic relative to alternatives like bank permanent or insurance conduit programs. For large institutional assets, life company loan sizes routinely reach $50M to $200M with no practical ceiling.
Why are life company loans non-recourse?
Life company loans are non-recourse by convention because the program is designed for institutional-quality assets where collateral quality alone is sufficient security. Non-recourse is standard with carve-outs for bad acts including fraud, misrepresentation, environmental liability, and voluntary bankruptcy. Sponsors who require recourse carve-out exceptions beyond standard bad-boy provisions will face resistance.
How do life company interest rates compare to other commercial mortgage programs?
Life company loans consistently offer the lowest all-in fixed rates in the commercial mortgage market, typically 10 to 50 basis points inside comparable CMBS or bank permanent programs on stabilized institutional-quality assets. The rate advantage reflects the life company's long-duration liability match, low cost of capital, and conservative underwriting that reduces credit risk premium.
What is yield maintenance and how does it affect prepayment?
Yield maintenance is the standard prepayment penalty on life company loans, requiring the borrower to compensate the lender for the present value of lost interest income if the loan is paid off before maturity. On a 20-year loan in a falling rate environment, yield maintenance can represent 10% to 20% of the outstanding balance. Defeasance is an alternative structure used less commonly by life companies.
Do life companies lend on all commercial property types?
Life companies are most active in multifamily, industrial, office, retail, and mixed-use. Multifamily and industrial receive the most aggressive terms given perceived durability. Hospitality is generally not financed by life companies. Ground leases, special-purpose properties, and assets with significant environmental exposure are also typically outside the life company box.
Can a private investor qualify for a life company loan, or is this only for institutional sponsors?
Private investors can qualify, but they must present with institutional-caliber documentation including audited financials, a strong balance sheet, and a comparable track record. The underwriting standard is effectively institutional regardless of borrower type. A high-net-worth private investor who owns a single Class A multifamily property and lacks audited financials will typically not clear life company credit.
How does the correspondent broker process work for life company loans?
Life companies originate the vast majority of their commercial mortgage volume through a network of designated correspondent brokers who have established allocation relationships and underwriting authority. A correspondent broker submits the deal, provides initial underwriting, and manages the diligence process on behalf of the life company. Working with a broker who does not have an active correspondent relationship with the target life company will result in slow response or no quote.
What DSCR do life companies require at underwriting?
Life companies typically require a minimum in-place DSCR of 1.30x, with most targeting 1.40x to 1.50x at the note rate on actual underwritten NOI. Underwritten NOI is not pro forma. Life company underwriters apply vacancy assumptions, management fee load, and capital reserve deductions even if the property is currently exceeding those metrics. Deals that pencil at exactly 1.30x in-place often underwrite to below the threshold after adjustments.
Ready to See If Your Deal Fits?
Submit your scenario and we will route it to the right program and lender within 24 hours.
Apply Now Call 310.708.0690 Text 310.758.3064