The quick read: The bank CRE concentration test is a pair of supervisory screens from the 2006 interagency guidance on commercial real estate concentrations. A bank whose construction, land development and other land loans reach 100% or more of its total capital, or whose total commercial real estate loans reach 300% or more of total capital after growing 50% or more over the prior 36 months, may be identified for further supervisory analysis. The guidance says the screens are high-level indicators, not limits on lending. They still reach your renewal. The same guidance tells banks to set internal concentration limits, and says a bank without enough capital behind a concentration should plan to reduce it or hold more capital. A bank managing its book that way has a reason to ration renewals, so an owner who gets a "no" on a performing property should shop lenders with balance-sheet room.
What are the 100% and 300% CRE concentration screens?
The two supervisory screens in the 2006 interagency CRE concentration guidance are construction, land development and other land loans at 100% or more of a bank's total capital, and total CRE loans at 300% or more of total capital combined with CRE balances that grew 50% or more over the prior 36 months.
The Federal Reserve sent the guidance to its examiners in SR letter 07-1 on January 4, 2007. The Fed, the FDIC and the OCC issued it on December 6, 2006, and it took effect on December 12, 2006. "Total capital" means total risk-based capital as the bank reports it in its Call Report. In SR letter 15-17 (December 18, 2015), the agencies reminded institutions of that existing guidance and said risk management should be commensurate with the level and nature of a bank's CRE concentration risk.
The guidance's CRE definition is what decides whether your loan counts. It covers construction and land loans, multifamily loans and nonfarm nonresidential loans repaid mainly from third-party rental income (50% or more of the source of repayment) or from the sale or refinancing of the property. It excludes nonfarm nonresidential loans repaid mainly from the cash flow of the owner's own operations, which is the owner-occupied business that buys its building.
| Supervisory screen (2006 interagency guidance) | Construction and land screen | Total CRE screen |
|---|---|---|
| Supervisory screen (2006 interagency guidance) What is measured | Construction and land screen Construction, land development and other land loans | Total CRE screen Total CRE as the guidance defines it: construction and land, multifamily, and investor-owned nonfarm nonresidential loans |
| Supervisory screen (2006 interagency guidance) Threshold | Construction and land screen 100% or more of total capital | Total CRE screen 300% or more of total capital, and CRE balances up 50% or more in the prior 36 months |
| Supervisory screen (2006 interagency guidance) Denominator | Construction and land screen Total risk-based capital from the Call Report | Total CRE screen Total risk-based capital from the Call Report |
| Supervisory screen (2006 interagency guidance) What crossing it means | Construction and land screen The bank may be identified for further supervisory analysis; it is not a cap | Total CRE screen The bank may be identified for further supervisory analysis; it is not a cap |
| Supervisory screen (2006 interagency guidance) What it means for a borrower | Construction and land screen Construction and land requests compete hardest for room at a bank near this line | Total CRE screen A fast-growing bank near this line may slow new CRE loans and renewals while it manages its book |
Are the CRE concentration screens a cap on bank lending?
No, the screens are not a cap: the guidance says the supervisory criteria do not constitute limits on a bank's lending activity but serve as high-level indicators to identify banks potentially exposed to concentration risk, and it adds that they are not a safe harbor if other risk indicators are present.
The guidance does not set one concentration limit for every bank. It asks each bank to run ongoing risk assessments, establish its own internal concentration limits and report concentrations to management and the board. Examiners then hold a dialogue with management about exposure and risk management, and banks with recent, significant growth in CRE lending receive closer review than banks with a track record of managing a concentration. The guidance lists factors that may mitigate the risk, including diversification across property types, geographic dispersion, underwriting standards, pre-sold units or take-out commitments on construction loans, and portfolio liquidity. It also names portfolio stress testing and sensitivity analysis as a key risk management element.
The sentence that matters most for a borrower is about capital. A bank with inadequate capital to absorb unexpected losses from a CRE concentration should develop a plan for reducing its CRE concentrations or for maintaining capital appropriate to the risk. The screen itself does not stop a loan. A bank's internal limit, or a plan to shrink its CRE book, can.
Why can a bank's CRE concentration affect your loan renewal?
A bank's CRE concentration can affect your renewal because every renewal keeps a loan on a book the bank must manage against its own internal limits and its capital, and a bank that examiners have flagged for closer review, or that is reducing its concentration under a capital plan, has fewer reasons to roll your loan.
Two mechanics follow from the screens themselves. A renewal does not add new balance, so it does not by itself feed the 50% growth test; a new loan does. That is why a bank near the 300% line may renew an existing borrower it would not take on today. But a bank that is shrinking its CRE book has to let balances run off somewhere, and a maturing loan is the easiest place to start. When you refinance away from that bank, you are asking another lender to add balance, so its appetite for growth is what you are testing.
The volume at stake is large. Trepp's Q2 2026 CRE Debt Universe (October 8, 2026) puts income-producing CRE debt at $5.12 trillion, with banks holding $1.92 trillion, or 37.5%, plus another $454.2 billion in construction loans and $712.0 billion in owner-occupied loans. Trepp estimates banks have $239.7 billion of income-producing loans due in 2026, about 12.5% of their balances, and notes that many near-term bank loans carry extension options or have already been modified, so stated schedules likely overstate what must refinance.
Banks are also re-running the math. The October 14, 2026 Beige Book reported that in the New York District a regional bank reset its loan stress-test assumptions to reflect higher rates, and credit standards tightened slightly for commercial mortgages. A renewal request now lands at a bank that is testing its CRE book against higher rates. For the full list of reasons a bank declines, see why your bank won't make a commercial real estate loan.
Which banks carry the highest CRE concentrations?
Smaller banks generally carry higher CRE concentrations than the largest banks: the FDIC's second-quarter 2026 Quarterly Banking Profile says banks with more than $250 billion in assets have lower concentrations of non-owner-occupied CRE loans relative to assets and capital than smaller banks, even though their past-due and nonaccrual rate is higher.
The FDIC's August 25, 2026 statement gives the numbers:
Non-owner-occupied CRE past-due and nonaccrual rate, banks over $250 billion (FDIC, Q2 2026): 3.08%, the seventh straight quarterly decline
Same rate at its recent peak (FDIC, Q3 2024): 4.99%
Same rate, pre-pandemic average (FDIC): 0.59%
Non-owner-occupied nonfarm nonresidential past-due and nonaccrual rate, banks with $10 billion to $250 billion (FDIC Chart 10, Q2 2026): 1.31%
Same rate, banks with $1 billion to $10 billion (FDIC Chart 10, Q2 2026): 1.10%
Industry volume of past-due and nonaccrual non-owner-occupied CRE loans (FDIC, Q2 2026): down $2.0 billion, or 8.9%, from the prior quarter
Read the two facts together. The largest banks have the worst problem-loan rate and the smallest CRE books relative to capital; regional and community banks have cleaner loans and heavier concentrations. So when a smaller bank declines to renew a performing loan, concentration is one of the first explanations to test. The same FDIC statement shows community banks still adding CRE: their total loans rose 1.6% in the quarter and 5.1% from a year earlier, led by nonfarm nonresidential CRE, 1-4 family residential and commercial and industrial loans.
How do you find a lender with balance-sheet room?
Find a lender with balance-sheet room by asking each bank directly whether CRE concentration or an internal limit is driving its answer, and by widening the search beyond banks, since Trepp's Q2 2026 data show government-sponsored enterprises, insurers and securitized lenders together hold more than half of income-producing CRE debt.
Trepp's shares are 22.8% for the government-sponsored enterprises, 15.9% for insurance companies and 15.1% for securitized lenders, a combined 53.8% (our arithmetic). None of those lenders is subject to a bank's CRE concentration screen, and each has its own appetite by property type, size and leverage. The lender types commercial mortgage brokers work with explains how they differ.
Ask your bank three questions before you move:
- Is the answer about my property and sponsor, or about your CRE book?
- Would a smaller loan, a paydown or a shorter renewal change the answer?
- If this is a portfolio decision, when do you expect room again?
If you own and operate the business in the building, ask how the bank classifies the loan. The guidance's CRE definition excludes nonfarm nonresidential loans repaid mainly from the owner's own operations, although construction and land loans count no matter who will occupy the building. Then compare banks of different sizes: community bank versus national bank covers how their appetites differ.
How do you get a renewal placed when your bank is out of CRE room?
Option 1, and our recommendation, is a commercial mortgage brokerage that takes the file your bank declined to lenders whose books have room, so a concentration problem at one bank does not become a maturity problem for you. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors.
Option 1: a commercial mortgage brokerage (our pick). We rank it first for three reasons. A concentration "no" is about the bank's book, not your property, so the fix is a different balance sheet, and finding which lenders have room for your property type and size is market work. One package underwrites across lender types: the rent roll, operating statement and sponsor file a bank needs are the same ones an insurer, a securitized lender or another bank reads. And the terms a new lender offers are negotiable, and a broker negotiates them on the borrower's side. YieldStack's software matches the deal against a catalog of 20,000+ loan programs. Human brokers then structure the request, negotiate for the borrower and carry the deal toward closing.
Option 2: go to another bank directly. A bank with a smaller CRE book relative to its capital may want the loan. Expect it to underwrite from scratch, including a new valuation.
Option 3: negotiate a bridge with your current bank. A short renewal, a paydown or more amortization may fit inside the bank's limits while you refinance elsewhere. Get any terms in writing.
What to send:
- The note, loan agreement, maturity date and any extension option terms
- Your bank's decline or renewal terms, in writing
- A trailing 12-month operating statement and a current rent roll
- Lease expirations for the next 24 months
- Sponsor and guarantor financial statements
- The most recent appraisal and its date
When the package is ready, send the deal for review. 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. 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.
The bottom line
The bank CRE concentration test is two supervisory screens: construction and land loans at 100% of total capital, or total CRE loans at 300% of capital after 50% growth in 36 months. They flag a bank for closer review rather than capping its lending, but a bank managing its CRE book against internal limits and capital can slow renewals. If yours declines a performing loan, test whether the answer is about the bank's book, and take the file to lenders with room.