The quick read: The best commercial real estate loan option in Washington State is the lender type whose published rules fit three facts about the property: what type it is, whether it is stabilized, and whether your own business occupies it. A building your business occupies points to SBA 504 or 7(a); stabilized apartments of five or more units point to agency or HUD loans; other stabilized income property points to banks, credit unions, CMBS or life companies; and a property in construction, lease-up or renovation points to construction, bridge or hard money until it stabilizes. A commercial mortgage brokerage tests every route on one file, and YieldStack, which publishes this guide, is our top pick for AI-native commercial mortgage brokerage: one submission is matched against 20,000+ loan programs, with 5–8 matches per deal. Washington State adds three rules that change the math: a graduated real estate excise tax on sales, a statewide cap on most apartment rent increases, and energy deadlines for large buildings. Local detail lives in the Washington State market hub.
How do you get lenders competing for a Washington State commercial loan?
You get lenders competing for a Washington State commercial loan by putting one complete file in front of several lender types at the same time, which is the work a commercial mortgage brokerage does; YieldStack, which publishes this guide, is our top pick for AI-native commercial mortgage brokerage. Submit your Washington State deal to start.
YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Four mechanics put it first in this guide:
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
Fees: 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.
Who decides: 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 complete Washington State file carries the rent roll or operating company financials, trailing operating statements, the contract or payoff letter, an excise tax estimate for any sale, each unit's last rent-increase date and, for an apartment building over 20,000 square feet or a building with more than 20,000 nonresidential square feet, the Clean Buildings status.
Which lender type fits which Washington State property?
The lender type that fits a Washington State property follows from whether your business occupies it, whether it holds five or more apartment units, and whether it is stabilized, because SBA, agency, HUD and bank programs publish rules keyed to those facts, while bridge and hard money lenders take transitional property on short terms.
| Option | Washington State deal it fits | Published rule (source, date) | Term or pricing basis (source, date) |
|---|---|---|---|
| Option Brokerage route (YieldStack, publisher of this guide) | Washington State deal it fits Any deal several lender types should price on one file | Published rule (source, date) One submission matched against 20,000+ loan programs, with 5–8 matches per deal | Term or pricing basis (source, date) Zero upfront; broker fee 0.50–1.00% of the loan amount, paid only at closing |
| Option Bank or credit union | Washington State deal it fits Stabilized income or owner-user property | Published rule (source, date) Banks: 85% LTV on improved property, 80% on commercial and multifamily construction (federal supervisory limits, Jan. 2026); credit unions: each one's written loan policy (NCUA rule, Jan. 2025) | Term or pricing basis (source, date) Set in each institution's quote |
| Option SBA 504 | Washington State deal it fits A business buying, building or renovating its own building | Published rule (source, date) Borrower puts in 10% to 20% of project cost (13 CFR 120.910, Jan. 2026); $5 million committed or outstanding per borrower and affiliates, $5.5 million per project only for small manufacturers and qualifying energy projects (13 CFR 120.931; SBA SOP 50 10 8.1, effective Oct. 1, 2026) | Term or pricing basis (source, date) 10-, 20- or 25-year terms; rate pegged above the 10-year Treasury (SBA, read Nov. 2026) |
| Option SBA 7(a) | Washington State deal it fits Owner-occupied real estate plus other business needs | Published rule (source, date) $5 million maximum loan (SBA, read Nov. 2026) | Term or pricing basis (source, date) Up to 25 years for real estate, including extensions (13 CFR 120.212, Jan. 2026); variable rate capped at the base rate plus 3.0 points above $350,000 (13 CFR 120.214, Jan. 2026) |
| Option Agency (Freddie Mac) | Washington State deal it fits Stabilized apartments with 5 or more units | Published rule (source, date) 80% maximum LTV and 1.25x minimum amortizing DCR on amortizing or partial interest-only fixed terms of 7 years and longer; small loans generally $2 million to $10 million for 5 to 50 units (term sheets, Apr. 2026) | Term or pricing basis (source, date) 5- to 10-year fixed terms (5, 7, 10, 12 or 15 years on small loans) with up to 30-year amortization; floating loans priced off 30-day Average SOFR (Apr. 2026) |
| Option HUD 223(f) and 221(d)(4) | Washington State deal it fits Apartments with 5 or more units, existing or new | Published rule (source, date) 223(f): 87% of value for market-rate projects (HUD Mortgagee Letter 2025-03, Jan. 8, 2025) | Term or pricing basis (source, date) 223(f) up to 35 years; 221(d)(4) up to 40 years (HUD, read Nov. 2026) |
| Option CMBS or life company | Washington State deal it fits Larger stabilized income property | Published rule (source, date) Set in each lender's quote | Term or pricing basis (source, date) Set in each lender's quote |
| Option Bridge or hard money | Washington State deal it fits Vacant, lease-up, renovation or short-hold property | Published rule (source, date) Hard money: LTVs typically 50% to 75% (NerdWallet, updated Mar. 2026); bridge: LTVs or LTCs of 65% to 80% (NerdWallet, updated Feb. 2026) | Term or pricing basis (source, date) High rates and short repayment terms (same page) |
Two rules narrow it further: SBA's 504 page lists speculation or investment in rental real estate as an ineligible use, and HUD's Section 223(f) accepts a newly built or substantially rehabilitated property once construction is complete and it has met HUD's debt service coverage minimum for at least one full month, with three consecutive months required before endorsement inside three years of the final certificate of occupancy (HUD Notice H 20-03, Mar. 2, 2020).
How much will a Washington State commercial lender lend against a property?
A Washington State commercial lender lends the smallest of three amounts: its leverage limit times value, which on a bank purchase loan means the lower of price and appraisal; the loan the property's net operating income can carry at the lender's minimum coverage ratio; and any program cap, such as SBA 504's $5 million limit per borrower and affiliates.
The federal banking agencies' guidelines (12 CFR part 34, subpart D, appendix A, revised as of January 1, 2026) set supervisory loan-to-value limits of 65 percent for raw land, 75 percent for land development, 80 percent for commercial, multifamily and other nonresidential construction, and 85 percent for improved property; on a purchase, value is the lesser of the acquisition cost or the appraised estimate. A bank may exceed a limit in individual cases it reports to its board at least quarterly, and a loan guaranteed by a U.S. government agency, such as an SBA 7(a) loan, is excluded when the guaranty at least equals the portion above the limit.
SBA 504 sizes from the borrower's side. Under 13 CFR 120.910, the borrower contributes at least 10 percent of project cost in the standard case, 15 percent if the business has operated two years or less or the building is limited or single-purpose, and 20 percent when both apply. Under 13 CFR 120.931, the 504 loan is limited to $5 million for each borrower and its affiliates, rising to $5.5 million per project only for small manufacturers (NAICS 31-33, with all production facilities in the United States) and for projects that cut the business's energy consumption at least 10 percent or upgrade renewable energy sources. Occupancy is the gate: 13 CFR 120.131 requires the business to occupy at least 51 percent of an existing building or 60 percent of a new one.
Illustrative (our arithmetic): a Tacoma investor buys a $3,000,000 flex building that appraises at $3,200,000 and nets $230,000 a year. A bank at the 85 percent limit sizes the purchase loan on the price, not the appraisal: $2,550,000, not $2,720,000. At an assumed 1.25x coverage minimum, the income supports $184,000 of annual debt service, and at an assumed 6.75 percent rate on 25-year amortization that carries about $2,219,000 of loan. The coverage test binds, so the buyer brings about $781,000 plus closing costs. Product detail is on the commercial loans page.
What do November 2026 index rates mean for each Washington State lender type?
November 2026 index rates set the base under most Washington State commercial loan quotes: FRED shows the 10-year Treasury yield at 4.86 percent and the bank prime rate at 7.00 percent on November 6, 2026, and overnight SOFR at 3.88 percent on November 9, before a lender adds its spread and fees.
10-year Treasury yield, November 6, 2026 (FRED, DGS10): 4.86%
Bank prime loan rate, November 6, 2026 (FRED, DPRIME): 7.00%
Overnight SOFR, November 9, 2026 (FRED, SOFR): 3.88%
SBA says the 504 rate is pegged to an increment above the current market rate for 10-year U.S. Treasury issues, and Freddie Mac's fixed-rate term sheet (April 2026) calls the Treasury index the most volatile part of the coupon, while its floating-rate term sheet (April 2026) prices off 30-day Average SOFR, an average of the overnight rate. SBA 7(a) variable rates sit on the prime rate or SBA's Optional Peg Rate, and 13 CFR 120.214 caps a 7(a) loan above $350,000 at 3.0 percentage points over that base.
Illustrative (our arithmetic): with FRED's bank prime rate at 7.00 percent on November 2, 2026, the first business day of the month, the ceiling on a variable-rate 7(a) loan above $350,000 works out to 10.00 percent, and the rate itself is negotiated between borrower and lender beneath it. Fixed agency debt also prices its exit: Freddie Mac's fixed-rate loans (April 2026) carry yield maintenance until securitized, then a 2-year lock-out, then defeasance, and yield maintenance without defeasance costs extra.
How much real estate excise tax does a Washington State commercial sale carry?
A Washington State commercial sale carries a graduated state real estate excise tax that the state Department of Revenue lists at 1.10 percent on the first $525,000, rising to 3 percent above $3,025,000 for sales closing through December 31, 2026, plus a local rate of 0.50 percent in Seattle, Bellevue, Tacoma, Everett, Spokane and Vancouver.
State rate, sales through December 31, 2026 (Department of Revenue): 1.10% to $525,000; 1.28% to $1,525,000; 2.75% to $3,025,000; 3% above $3,025,000
State rate, sales from January 1, 2027 (same page): 1.1% to $551,000; 1.28% to $1,551,000; 2.75% to $3,051,000; 3.0% above $3,051,000
Local rate, effective May 1, 2026 (Department of Revenue table): 0.50% in Seattle, Bellevue, Tacoma, Everett, Spokane and Vancouver
Entity sales: a transfer of 50% or more of an entity's ownership interest, counted across 36 months, is taxed on the true and fair value of its real estate
The Department says the seller usually pays the tax, but if the seller does not, the buyer is responsible, and unpaid tax can create a lien on the property, so confirm payment at closing. Buying the LLC that owns a building does not avoid the tax, and recording a mortgage or deed of trust needs no excise tax affidavit, according to the same page.
Illustrative (our arithmetic): a $4,000,000 Seattle sale that closes in December 2026 owes $89,075 of state tax ($5,775 + $12,800 + $41,250 + $29,250) and $20,000 of local tax, $109,075 in all, about 2.7 percent of the price. The same sale on or after January 1, 2027 owes $88,581 of state tax, $494 less, because each threshold rises by $26,000. When a bridge loan's exit is a sale, that tax comes out of the proceeds that repay it.
How does Washington State's rent cap change an apartment loan?
Washington State's rent cap changes an apartment loan by limiting how fast in-place rents can rise: the Department of Commerce publishes the maximum annual increase as 9.683 percent for 2026 and 10 percent for 2027, the statute bars any increase in a tenancy's first 12 months, and a value-add plan's rent growth has to fit that schedule.
2026 maximum annual increase (Department of Commerce): 9.683%
2027 maximum annual increase (same page): 10%, the ceiling, since 7 points plus the Seattle-area CPI change came to 11.53%
Formula (RCW 59.18.700, as Commerce summarizes it): 7% plus CPI, or 10%, whichever is less, in any 12-month period
New-construction exemption (RCW 59.18.710): units whose first certificate of occupancy was issued 12 or fewer years before the notice of the increase
For construction lending, a new building's rents sit outside the cap until its certificate of occupancy is more than 12 years old; an older building bought for renovation is inside it.
Illustrative (our arithmetic): a covered Tacoma unit renting at $1,500 against a $1,725 market rent, a 15 percent gap, can rise at most 10 percent at a 2027 renewal, to $1,650, so a bridge lender sizing the exit on market rent waits two renewals for the gap to close. For Seattle, see how DSCR loans work in Seattle under the state rent cap.
Which Washington State buildings face Clean Buildings deadlines?
Washington State buildings whose nonresidential, hotel, motel and dormitory floor area exceeds 50,000 gross square feet, excluding parking garages, must meet the Clean Buildings Performance Standard, and the Department of Commerce lists compliance dates of June 1, 2026 above 220,000 square feet, June 1, 2027 above 90,000 and June 1, 2028 above 50,000.
Compliance means benchmarking, an operations and maintenance program, an energy management plan and meeting an energy performance metric. Without an approved compliance or exemption application or an extension, Commerce says penalties will be assessed at the maximum amount of $5,000 plus $1.50 per square foot of gross floor area.
Tier 2 adds every apartment building over 20,000 square feet and nonresidential buildings of 20,001 to 50,000 square feet, which must report benchmarking, an operations and maintenance program and an energy management plan to Commerce by July 1, 2027, with no performance target yet.
Illustrative: a 120,000-square-foot Bellevue office building falls in the June 1, 2027 group, so settle its compliance status before a refinance or sale goes to lenders.
How much new apartment supply are Seattle, Tacoma, Spokane and Vancouver adding?
Seattle, Tacoma, Spokane and Vancouver are adding very different amounts of apartment supply, according to Census Bureau permit files: King County authorized 5,102 units in buildings of five or more units in 2025, down from 7,119 in 2024, while Pierce County rose from 1,269 to 1,765, the competing supply a lease-up lender has to price.
Units permitted in buildings of 5 or more, 2025 annual county file (2024 in parentheses):
King County (Seattle, Bellevue): 5,102 (7,119)
Pierce County (Tacoma): 1,765 (1,269)
Spokane County (Spokane): 1,425 (1,792)
Snohomish County (Everett): 1,332 (1,660)
Clark County (Vancouver): 1,014 (1,361)
Washington State, annual state file: 15,001 (16,358)
A construction or bridge lender pricing a new Tacoma building underwrites lease-up against five-plus permits that rose about 39 percent in a year. In Seattle, King County's count fell about 28 percent, so fewer new units follow a building delivering now, and Spokane, Snohomish and Clark county permits fell too.
The bottom line
The best commercial real estate loan in Washington State is the one whose published rules fit the property's type, stabilization and occupancy, and the brokerage route compares those rules on one file; YieldStack, which publishes this guide, is our top pick for AI-native commercial mortgage brokerage. Size equity from the published limits, with SBA 504 the 10 percent route for owner-users, then add the state lines: graduated excise tax with higher thresholds from January 1, 2027, a 10 percent rent cap for 2027, and Clean Buildings deadlines that reach apartment buildings over 20,000 square feet on July 1, 2027.