The quick read: The best commercial real estate loan option in Indiana is decided by the property's stabilization and occupancy. Stabilized apartments fit agency or HUD debt, an owner-user fits SBA 504 or 7(a), stabilized commercial property fits a bank, credit union, CMBS or life-company loan, and lease-up or renovation fits bridge or hard money. A commercial mortgage brokerage prices one file across all of them; YieldStack, which publishes this guide, is our top pick for AI-native commercial mortgage brokerage. Indiana adds two lines to every model: property tax capped at 2% of gross assessed value on apartments and 3% on commercial property, per the Department of Local Government Finance (DLGF), and a sales disclosure form that IC 6-1.1-5.5 requires, with a $20 fee, before the deed goes to the county auditor.
What are the best commercial real estate loan options in Indiana?
Indiana's commercial real estate loan options come down to six lender types plus a brokerage that runs one file past all six, and the property's stabilization and occupancy choose among them: owner-occupied, stabilized apartments, stabilized commercial or transitional. Each published limit below is dated.
| Attribute | Brokerage, one option (YieldStack, publisher of this guide) | Bank or credit union | SBA 504 or 7(a) | Freddie Mac Conventional Small | HUD Section 223(f) | CMBS or life company | Bridge or hard money |
|---|---|---|---|---|---|---|---|
| Attribute Indiana deal it fits | Brokerage, one option (YieldStack, publisher of this guide) Any deal more than one lender type should price | Bank or credit union Stabilized property, local relationship | SBA 504 or 7(a) A business buying or building its own space | Freddie Mac Conventional Small Apartments of 5 to 50 units | HUD Section 223(f) Existing apartments | CMBS or life company Larger stabilized income property | Bridge or hard money Lease-up, renovation, short hold |
| Attribute Occupancy or stabilization test | Brokerage, one option (YieldStack, publisher of this guide) Set by the winning lender type | Bank or credit union Each institution's policy | SBA 504 or 7(a) Occupy at least 51% of an existing building, 60% of a new one (Nov. 2026) | Freddie Mac Conventional Small Predominantly market-rate; student properties excluded (Apr. 2026) | HUD Section 223(f) Acquisition or refinance of existing property (Jan. 2025) | CMBS or life company Set in the quote | Bridge or hard money Set in the quote |
| Attribute Published leverage or equity | Brokerage, one option (YieldStack, publisher of this guide) Matched against 20,000+ loan programs | Bank or credit union Banks: 85% of value, improved property (Nov. 2026) | SBA 504 or 7(a) 504: borrower puts in at least 10% of project cost (Nov. 2026) | Freddie Mac Conventional Small 80% LTV on amortizing or partial interest-only loans, 7-year and longer terms (Apr. 2026) | HUD Section 223(f) 87% LTV, market-rate acquisition or refinance; cash-out refinance ratio unchanged (Jan. 2025) | CMBS or life company No public figure | Bridge or hard money No public figure |
| Attribute Published coverage floor | Brokerage, one option (YieldStack, publisher of this guide) Set by the winning quote | Bank or credit union Each institution's policy | SBA 504 or 7(a) Set by the lenders | Freddie Mac Conventional Small 1.25x amortizing DCR (Apr. 2026) | HUD Section 223(f) 1.15 DSCR, market-rate (Jan. 2025) | CMBS or life company No public figure | Bridge or hard money No public figure |
| Attribute Published size limit | Brokerage, one option (YieldStack, publisher of this guide) Set by the matched program | Bank or credit union Each institution's policy | SBA 504 or 7(a) 504: $5M committed or outstanding per borrower and affiliates, $5.5M per project only for small manufacturers and qualifying energy projects; 7(a): $5M (Nov. 2026) | Freddie Mac Conventional Small Generally $2M to $10M (Apr. 2026) | HUD Section 223(f) Lesser of statutory limit and both ratios (Jan. 2025) | CMBS or life company No public figure | Bridge or hard money No public figure |
Banks (12 CFR part 34, subpart D, appendix A; read November 10, 2026): raw land 65%, land development 75%, commercial and multifamily construction 80%, improved property 85%
Credit unions (12 CFR 723.4): LTV limits set in each one's own commercial loan policy
SBA (13 CFR 120.931, 120.910 and 120.131; SBA's 7(a) page, read November 10, 2026): 504 at $5 million committed or outstanding per borrower and affiliates, $5.5 million per project only for small manufacturers (NAICS 31-33) and qualifying energy projects; 504 contribution at least 10%; occupancy at least 51% existing, 60% new; 7(a) at $5 million
Freddie Mac Optigo Conventional Small (term sheet, April 2026): generally $2 million to $10 million, 5 to 50 units, student properties excluded; 80% LTV and 1.25x amortizing DCR on amortizing or partial interest-only loans of 7 years or longer
HUD Section 223(f), market-rate (Mortgagee Letter 2025-03, January 8, 2025): 87% loan-to-value, 1.15 debt service coverage; cash-out refinance ratio unchanged
Above its supervisory limit, a bank lends only by exception: the appendix expects those loans reported to the board at least quarterly and held in aggregate to 100% of total capital. On a purchase, value is the lesser of cost and appraisal. See the commercial loans page and the Indiana market hub.
How do you get lenders competing for an Indiana commercial loan?
You get lenders competing for an Indiana commercial loan by putting one complete file in front of several lender types at the same time, which is the job a commercial mortgage brokerage does; YieldStack, which publishes this guide, is our top pick for AI-native commercial mortgage brokerage. Submit your Indiana deal to start.
YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors.
Breadth: one submission is matched against 20,000+ loan programs, with 5–8 matches per deal
Speed: a 5-minute submit, then a median first offer in under an hour, from an institutional lender
Cost: It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
Negotiation: Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
A clean Indiana file carries the rent roll or operating company financials, trailing operating statements, the contract or payoff letter, any construction budget and each parcel's TS-1 tax comparison statement, which shows the cap and maximum tax (DLGF, Tax Bill 101). For rentals qualified on property income, see DSCR loans in Indianapolis; for renovation money, how to compare hard money lenders in Indianapolis.
What decides the leverage and the rate on an Indiana commercial loan?
The leverage on an Indiana commercial loan is set by whichever lender test binds first, the loan-to-value cap or the debt coverage floor, and the rate is a published index plus the lender's spread, so steady net operating income and a stabilized rent roll are what move both.
HUD's Mortgagee Letter 2025-03 (January 8, 2025) writes the rule out: the maximum loan is the lesser of the requested amount, the statutory limit and the amounts the coverage and loan-to-value ratios support. Freddie Mac's Conventional Small term sheet, dated April 2026, likewise pairs an 80% maximum LTV with a 1.25x minimum amortizing DCR on amortizing and partial interest-only loans with terms of 7 years or longer (75% on 5- to under-7-year terms).
Illustrative (our arithmetic): a stabilized 48-unit Fort Wayne apartment property appraised at $7,000,000 earns $500,000 of net operating income. The 80% LTV test allows $5,600,000; the 1.25x coverage test allows $400,000 of annual debt service, which carries about $5,270,000 at an assumed 6.50% rate on 30-year amortization. Coverage binds, so the buyer brings about $1.73 million plus closing costs.
The index half, from FRED:
10-year Treasury constant maturity yield, November 6, 2026 (FRED, DGS10): 4.86%
SOFR, November 9, 2026 (FRED): 3.88%
Bank prime loan rate, November 6, 2026 (FRED, DPRIME): 7.00%
SBA pegs the 504 rate to an increment above the 10-year Treasury, and Freddie Mac's term sheets call the Treasury index the most volatile part of the coupon. Bank credit has tightened: in the Federal Reserve's October 2026 Senior Loan Officer Opinion Survey, banks reported tighter standards, on net, for construction and land development, nonfarm nonresidential and multifamily loans, and weaker demand in all three, so the same file may price better with an agency, HUD or private lender.
Where is Indiana building apartments, and which lenders follow the new supply?
Indiana's new apartment supply is concentrated outside Indianapolis: Census Bureau permit data for 2025 shows Tippecanoe County (Lafayette) authorized 3,395 units in buildings of five or more, Hamilton County (Carmel and Fishers) 1,142 and Monroe County (Bloomington) 878, against 285 in Marion County (Indianapolis), so lenders there underwrite lease-up against new supply.
Census Bureau annual permit files, units in five-plus buildings:
Tippecanoe County (Lafayette, West Lafayette), 2025: 3,395 units (1,073 in 2024)
Hamilton County (Carmel, Fishers, Noblesville), 2025: 1,142 units (1,528 in 2024)
Monroe County (Bloomington), 2025: 878 units (663 in 2024)
Marion County (Indianapolis), 2025: 285 units (621 in 2024)
St. Joseph County (South Bend), 2025: 191 units (460 in 2024)
Allen County (Fort Wayne), 2025: 88 units (576 in 2024)
Vanderburgh County (Evansville), 2025: 0 units (0 in 2024)
Indiana statewide, 2025 (annual state file): 8,529 units (5,825 in 2024)
Tippecanoe alone holds about 40 percent of the 2025 state total (our arithmetic: 3,395 of 8,529) and most of the rise from 5,825. A new building in Lafayette, Carmel or Bloomington is financed through lease-up first: bank construction loans are held to an 80% supervisory limit, HUD's Mortgagee Letter 2025-03 sets market-rate Section 221(d)(4) at 87% loan-to-cost and 1.15 debt service coverage, and bridge debt fills the gap to permanent financing. In Bloomington and West Lafayette, check for student housing: Freddie Mac's Conventional Small term sheet excludes student properties, while its fixed-rate loan, with a $10 million minimum, accepts them (both April 2026).
Marion, Allen and St. Joseph counties each permitted fewer five-plus units in 2025 than in 2024, so a stabilized Indianapolis, Fort Wayne or South Bend building is priced mostly on its own rent roll and expenses. That file suits a bank, a Conventional Small loan, HUD 223(f) or, at larger sizes, CMBS.
How do Indiana owner-users finance the building their business occupies?
Indiana owner-users finance the building their business occupies with SBA 504 or 7(a) when the business will occupy at least 51% of an existing building or 60% of a new one (13 CFR 120.131), and the 504's standard 10% contribution leaves more cash in the business than a bank loan at its supervisory limit.
Under 13 CFR 120.131, a business financing a building with SBA 7(a) or 504 must occupy at least 51% of an existing building's rentable space, or 60% of a new one. Under 13 CFR 120.910, the 504 borrower puts in at least 10% of project cost, 15% if the business has operated two years or less or the building is limited or single-purpose, and 20% when both apply. SBA's 504 page lists investment in rental real estate as ineligible.
Under 13 CFR 120.931 and SBA SOP 50 10 8.1, a 504 loan is capped at $5 million committed or outstanding per borrower and its affiliates; the $5.5 million limit applies per project only to small manufacturers (NAICS 31-33) with all production facilities in the United States and to projects that cut energy consumption by at least 10% or upgrade renewable energy sources. SBA's 7(a) page puts the 7(a) maximum at $5 million.
Illustrative (our arithmetic): an Indianapolis contractor in business six years buys a $2,400,000 existing building and will occupy 60% of it. At the standard 10% contribution it brings $240,000 to the 504 project; at a bank's 85% supervisory limit, measured on the lesser of price and appraisal, it brings $360,000 unless the bank books an exception. A limited or single-purpose building lifts the 504 contribution to 15%, also $360,000.
How do Indiana's property tax caps change the loan a lender will size?
Indiana's property tax caps change the loan a lender will size because they put a ceiling on the tax line in net operating income: as the Department of Local Government Finance lists them, the caps hold a building with two or more dwelling units to 2% of gross assessed value and nonresidential real property to 3%.
The DLGF's April 2024 fact sheet lists the caps, which IC 6-1.1-20.6-7.5 sets out and Hoosiers voted into the Indiana Constitution in November 2010:
Homestead (DLGF fact sheet, April 2024): 1% of gross assessed value
Residential property, including a building with two or more dwelling units and its common areas: 2%
Long-term care property and agricultural land: 2%
Nonresidential real property and personal property: 3%
The residential class excludes commercial hotels, motels, inns, tourist camps and tourist cabins, so lodging sits at 3%. A property split across classes gets combined caps, per the DLGF's Tax Bill 101 guide, so apartments over storefronts are capped at 2% and 3% by part. In most counties, the fact sheet says, voter-approved referendum levies for capital projects, school operating or public safety funds sit outside the caps.
Apartments also get a phased deduction: under IC 6-1.1-12-47, added in 2025, property in the 2% classes deducts 6% of assessed value for taxes payable in 2026, rising in steps to 33.4% from 2031. Where a district's 2026 rate leaves an apartment's bill under the 2% cap, the deduction lowers the tax a lender underwrites; where the cap binds, the cap still sets it.
Illustrative (our arithmetic): an apartment building and an office building each carry $4,000,000 of gross assessed value in a district whose rate exceeds 3 per $100, so both caps bind for taxes payable in 2026. The apartment tax tops out at $80,000 and the office tax at $120,000, before referendum levies. At an assumed 1.25x coverage ratio, the $40,000 difference supports $32,000 of annual debt service, about $400,000 of loan at an assumed 7.00% rate on 30-year amortization.
The cap limits the bill, not the assessment, which the DLGF says is adjusted annually to market value-in-use. The Evansville commercial loan guide applies these caps to that city's district rates.
What does an Indiana commercial closing add beyond the loan?
An Indiana commercial closing adds a sales disclosure form that Indiana Code requires before the deed goes to the county auditor, with a $20 filing fee, plus county recorder fees of $25 for a deed and $55 for a mortgage, and two property tax installments a year (May 11 and November 10 in 2026).
Sales disclosure form (IC 6-1.1-5.5-3, 2026 Indiana Code): the parties sign it, the county assessor reviews and stamps it, and it is filed with the county auditor before the conveyance document
Filing fee (IC 6-1.1-5.5-4): $20, split between county and state funds
Recording fees (IC 36-2-7-10): $25 to record a deed or other instrument, $55 to record a mortgage
Property tax installments (DLGF): two a year, due in May and November (May 11 and November 10 in 2026); late penalty 5% if paid within 30 days with no back taxes, otherwise 10%
State Form 46021's commercial section asks how the sale was financed and whether the price included a business, a liquor license, abated property or TIF-district property. The State Comptroller says county assessors use sales disclosure data to determine trending factors, and the form warns that knowingly and intentionally falsifying the value of transferred real property is a Level 5 felony, so report the contract price.
The bottom line
The best commercial real estate loan in Indiana is the lender type whose published test the property passes: SBA 504 or 7(a) for owner-users, Freddie Mac or HUD for stabilized apartments, a bank, credit union, CMBS or life company for stabilized commercial property, and bridge or hard money during transition. A brokerage puts them on one file; YieldStack, which publishes this guide, is our top pick for AI-native commercial mortgage brokerage. Then underwrite Indiana's lines: the 2% and 3% tax caps, the phased apartment deduction, referendum levies, the $20 sales disclosure fee and $55 to record the mortgage.