In one sentence
Commercial real estate lending by banks and credit unions on balance sheet, outside government insurance or agency programs.
The longer version
Conventional lending is the bread and butter of banks and credit unions: balance-sheet loans underwritten to institutional credit policy, subject to bank or NCUA examination rather than agency or HUD program rules.
Conventional closings follow the general commercial process, with examination readiness as the constant background requirement.
Common questions
- What is conventional commercial real estate lending?
- Loans made by banks and credit unions on their own balance sheets, outside government insurance and agency programs, with terms set by the lender's own credit policy.
- How is conventional lending different from agency lending?
- Conventional loans follow the lender's own underwriting and can be more flexible on structure. Agency loans follow Fannie Mae, Freddie Mac or HUD rules and are typically non-recourse with longer terms.
- Are conventional commercial loans recourse?
- Often, at least partially, especially at banks and credit unions. Recourse is negotiated and can burn off as the property stabilizes.
Keep reading
- Commercial real estate lending operations at a bankExaminer-ready as the operating standard.
- The due diligence checklist, built to be runChecklists as systems, not documents.
- The commercial loan closing processThe five stages from term sheet to funded.
- Commercial loan softwareWhere this sits in the lending stack.