How to Know If a Lender Will Actually Close Your Deal
When you know exactly which lenders want your deals, you can focus energy on real opportunities instead of wasting time on dead ends.
You send a deal to a lender who claims to be "aggressive on multifamily." You wait two weeks for a response. When it finally comes, it's a polite pass because your property has 18 units instead of their 20-unit minimum, or because they don't lend in that specific county, or because your net worth falls short of their undisclosed threshold. Maybe all three.
This cycle repeats with the next lender, and the next. Meanwhile, your purchase timeline shrinks and your competitive position weakens. The real cost isn't just the wasted time — it's the deals you lose because you're chasing financing from lenders who were never going to say yes. And the larger your commercial real estate portfolio gets, the more expensive these costs become.
Every lender operates within a "credit box" — specific parameters that determine which deals they'll approve. Understanding these boxes before you apply is the difference between efficient execution and expensive delays.
What's Really Inside a Credit Box
Financial Parameters
Loan-to-value limits vary significantly. Some lenders cap at 70% LTV regardless of deal quality. Others stretch to 80% for strong sponsors with excellent properties. These limits often differ by property type and market classification.
Debt service coverage requirements typically range from 1.15x to 1.35x, but some lenders calculate coverage differently. They might exclude certain income streams or apply different vacancy assumptions. Understanding their specific methodology can matter a lot.
Size Constraints
Minimum loan amounts often exceed what lenders advertise. A bank claiming "$1M minimum" might really prefer deals above $3 million. Below their sweet spot, you get junior underwriters and slower timelines.
Maximum loan amounts can be deceiving too. A $50 million cap might shrink to $25 if you're in a secondary market or dealing with an asset type they consider riskier.
Geographic Reality
"We lend nationwide" is often marketing speak. Many lenders have specific MSA preferences, state concentration limits, or internal policies that restrict certain regions. Some avoid markets they consider overheated or unfamiliar.
County-level restrictions are common but rarely disclosed upfront. A lender might love Texas but exclude certain rural counties, or embrace California while avoiding anything north of Sacramento.
Reading Between the Lines of Lender Marketing
When lenders tout "flexible underwriting," they usually mean flexible within their specific parameters — not flexible parameters themselves. A debt fund might waive personal guarantees but still require 75% LTV maximum.
"Competitive rates" often signals that rate is their primary competitive tool, which usually means tighter credit boxes to compensate for aggressive pricing. The cheapest rate quotes frequently come with the most restrictive terms.
"Relationship focused" typically means they prefer borrowers who bring multiple deals or other banking business. They might offer better terms for repeat clients but be less interested in one-off transactions.
Warning signs include vague loan program descriptions, reluctance to discuss specific parameters, and marketing that emphasizes speed over substance. Lenders confident in their market position are usually transparent about their requirements.
The Geography Trap
Geographic appetite is where marketing claims diverge most from reality. A lender's "national platform" might mean they have licenses everywhere but lending teams concentrated in three states.
Market knowledge requirements create invisible barriers. Some lenders require local market experience even for excellent sponsors. Others prefer deals in MSAs where they have existing relationships with brokers, attorneys, and property managers.
Concentration limits affect availability in real time. A lender might have aggressive appetites for Dallas multifamily until they hit their internal exposure limit, then become completely unavailable for months.
Branch footprint influences lending appetite more than most investors realize. Banks often prefer markets where they have physical presence, existing customers, or deposit-gathering strategies.
Sponsor Profile Matching
Net worth requirements are often multiples of loan amount rather than absolute minimums. Common ratios range from 0.5x to 2.0x the loan balance, with some lenders requiring the net worth to be maintained throughout the loan term.
Liquidity expectations typically require 6 to 18 months of debt service in readily available funds, but definitions of "readily available" vary. For example, some lenders count retirement accounts, others don't.
Experience thresholds can be surprisingly specific. "Multifamily experience" might mean different things to different lenders. Some want direct ownership experience, others accept property management or a development background.
Personal guarantees, even when "limited," often have broader triggers than borrowers expect. Understanding exactly what events activate guarantees helps you evaluate true risk exposure.
Deal Structure Red Flags
Certain property characteristics trigger automatic rejections at many lenders. Ground leases, manufactured housing components, and master-lease structures often fall outside standard credit boxes.
Mixed-use properties create complications even when multifamily is the primary use. Many lenders avoid anything with retail, office, or commercial components regardless of the income mix.
Environmental issues — even minor ones — can derail financing. Properties near gas stations, dry cleaners, or industrial sites might require specialized lenders willing to handle environmental risk.
Renovation scope affects lender interest significantly. Light cosmetic work usually qualifies for standard programs, but major rehabs often require construction lending expertise that many traditional lenders lack.
Getting Credit Box Intel Before You Apply
Ask specific questions during initial conversations: "What's your typical LTV range for value-add deals?" or "Do you have any restrictions on properties built before 1980?" Vague responses often indicate inflexible parameters.
Request examples of recently closed deals similar to yours. Lenders proud of their market position usually provide relevant case studies that reveal their actual appetite.
Test geographic appetite with specific addresses or neighborhoods. "Do you lend in downtown Phoenix?" gets better information than "Do you lend in Arizona?"
Pay attention to response times and question quality during initial discussions. Lenders genuinely interested in your deal type respond quickly with thoughtful questions. Delayed or generic responses often signal limited interest.
Having access to detailed credit box information eliminates this guesswork entirely. Instead of spending weeks testing lender appetite through trial and error, Janover Pro provides specific parameters upfront — loan amounts, geographic preferences down to the county level, and much more. You can see exactly which lenders match your deal profile before you reach out.
Working Within the System
Once you understand credit box realities, you can structure approaches more strategically. Lead with deals that clearly fit within parameters rather than pushing boundary cases first.
Build relationships with lenders where your typical deals align with their sweet spots. A lender who loves your deal profile will often stretch for good borrowers (when market conditions permit).
Consider how you can modify deal structures to fit desirable credit boxes. Sometimes adjusting equity contributions or guarantee structures opens up vastly superior lending options.
Remember that credit boxes evolve with market conditions, regulatory changes, and lender experiences. What works today might not work next quarter, so ongoing relationship maintenance and market intelligence are truly important if you want to be consistent in your execution.