The quick read: Six routes lead to a permanent loan on a stabilized commercial property: a commercial mortgage brokerage that puts one complete file in front of many lender programs (YieldStack, which publishes this guide, is our pick for that route), banks and credit unions, life insurance companies, CMBS conduits, agency multifamily lenders for apartments, and SBA programs for owner-users. Banks hold the most: the Federal Reserve's Financial Accounts (Z.1) release of September 11, 2026 shows U.S.-chartered depository institutions holding $2,252.2 billion of the $4,011.5 billion in commercial mortgages outstanding at the end of the second quarter of 2026. Stabilized means occupancy has reached the level the market supports and has held there. Federal appraisal guidance ties stabilized occupancy to the level a property reaches after reasonable exposure to the leasing market at terms comparable to similar properties, and one agency multifamily guide sets floors of 85% physical and 70% economic occupancy on the commitment date and for the preceding 3 months.
What is a permanent loan, and what counts as stabilized?
A permanent loan is long-term commercial mortgage debt sized on the income a property already earns, and a property counts as stabilized when its occupancy has reached the level the market supports and held there long enough that trailing income, not a projection, can carry the payment. Lenders test both before they quote.
A permanent loan is the take-out at the end of a value-add, lease-up or construction plan. It replaces short-term debt that was sized on a business plan with long-term debt sized on results, which is why a permanent lender's first question is whether the plan is finished. If it is not, read whether you can refinance a commercial property that is not stabilized, the opposite case to this one.
Federal appraisal guidance gives the anchor definition. The Interagency Appraisal and Evaluation Guidelines, published in the Federal Register on December 10, 2010, describe stabilized occupancy for an income-producing property as the occupancy level it is expected to achieve after it is exposed to the market for lease over a reasonable period of time, at terms and conditions comparable to similar properties. The same guidelines tell an appraiser valuing a partially leased rental property to deduct items such as leasing commissions, rent losses and tenant improvements, because the building has not reached stabilized occupancy.
Lenders turn the definition into four tests you can run before you apply:
Occupancy held: physical and economic occupancy at or above the lender's floor across a trailing period, not only on the day you apply
Trailing-12 NOI: the last twelve months of collected income less operating expenses, the figure a permanent loan is usually sized on
Rollover: how much of the rent roll expires during the loan term, and whether reserves or cash cover the re-leasing cost
In-place rents against market: whether leases sit near market rent, so income is neither inflated by above-market leases nor hidden by concessions
Who lends on a stabilized commercial property?
Stabilized commercial property can be financed by several lender types, because steady trailing income lets banks and credit unions, life insurance companies, CMBS conduits, agency multifamily lenders and SBA programs each size a long-term loan on it. A brokerage that shops one file across those channels is the route we list first, for the reasons below.
1. A commercial mortgage brokerage (our pick: YieldStack). YieldStack publishes this guide, and the brokerage route is our editorial pick for an investor whose property has just stabilized and who wants several permanent lenders pricing the same file. Our criteria: how many loan programs review the deal, whether a human structures the request before any lender sees it, and whether the fee is stated before you submit. The brokerage arranges and negotiates; the lender makes the credit decision.
2. Banks and credit unions. Balance-sheet lenders that hold the loan and usually want the relationship that comes with it: deposits, a guarantor and a local read on the property. They cover the widest range of property types and loan sizes, and their fixed-rate terms are often shorter than life company or agency debt. Federally supervised banks set their own loan-to-value limits under a supervisory ceiling of 85% for improved property, which the federal real estate lending guidelines define to include completed commercial property and other income-producing property that is completed and available for occupancy. See conventional bank loans for what banks test.
3. Life insurance companies. Insurers lend from their general accounts to match long-dated liabilities, so they favor long fixed-rate terms, conservative leverage and well-leased, well-located buildings. A stabilized property with durable leases is their core product. See life company loans for how they underwrite.
4. CMBS conduits. Conduit lenders originate loans to pool and sell as commercial mortgage-backed securities. Underwriting is standardized around in-place cash flow, loans are usually non-recourse with carve-outs, a servicer handles the loan after closing, and prepayment typically runs through defeasance or yield maintenance.
5. Agency multifamily lenders. For apartments only. Approved agency lenders originate under a published selling and servicing guide with written occupancy floors, which makes agency debt the most rule-bound answer to what stabilized means for multifamily.
6. SBA programs for owner-users. Only when the business occupies the building. Federal rules let a borrower buying or renovating an existing building with 7(a) or 504 financing permanently lease up to 49% of the rentable property if it occupies and uses at least 51%, and SBA says a 504 loan cannot be used for speculation or investment in rental real estate.
For how these channels differ beyond stabilization, see the lender types a commercial mortgage broker works with.
How much commercial mortgage debt does each lender type hold?
Banks hold the largest share of commercial mortgage debt, and the Federal Reserve's Financial Accounts released September 11, 2026 put U.S.-chartered depository institutions at $2,252.2 billion of the $4,011.5 billion outstanding at the end of the second quarter of 2026, with life insurers at $513.0 billion and ABS issuers, the line that holds CMBS collateral, at $527.1 billion.
Apartments look different. In the same release, multifamily mortgages totaled $2,493.4 billion, with government-sponsored enterprises holding $715.5 billion, agency- and GSE-backed mortgage pools $453.3 billion, depositories $743.9 billion and life insurers $268.5 billion. That is why agency execution is the first comparison for a stabilized apartment building and absent for office, retail or industrial property, where the agency- and GSE-backed pool line in the commercial table reads 0.0.
Lender types compared (Federal Reserve Z.1, release of September 11, 2026; amounts outstanding at the end of 2026:Q2, billions of dollars):
| Attribute | Banks | Credit unions | Life insurers | CMBS | Agency multifamily | SBA 504 |
|---|---|---|---|---|---|---|
| Attribute Commercial mortgages held | Banks $2,252.2 (U.S.-chartered depositories) | Credit unions $131.7 | Life insurers $513.0 | CMBS $527.1 (ABS issuers) | Agency multifamily 0.0 (apartments only) | SBA 504 Not broken out |
| Attribute Multifamily mortgages held | Banks $743.9 | Credit unions $49.9 | Life insurers $268.5 | CMBS $75.1 (ABS issuers) | Agency multifamily $715.5 GSEs plus $453.3 in pools | SBA 504 Not broken out |
| Attribute Usual rate index | Banks Treasury, swap or prime | Credit unions Treasury or prime | Life insurers Treasury | CMBS Treasury or swap | Agency multifamily Treasury or SOFR | SBA 504 10-year Treasury, for the debenture |
| Attribute Stabilization evidence it leans on | Banks Trailing NOI and the sponsor relationship | Credit unions Trailing NOI and membership | Life insurers Lease quality and low leverage | CMBS In-place cash flow, standardized | Agency multifamily Written occupancy floors over a trailing window | SBA 504 Business cash flow and 51% occupancy |
| Attribute Best fit | Banks Most property types and sizes | Credit unions Smaller local loans | Life insurers Well-leased, well-located assets | CMBS Larger, standard income properties | Agency multifamily Stabilized apartments | SBA 504 Owner-occupied buildings |
The Z.1 tables do not break out SBA lending, so that column carries the program rules instead. The rate-index row describes how each channel usually quotes, not a rule any lender publishes.
What do permanent lenders price off right now?
Fixed-rate permanent loans on stabilized property are usually quoted as a spread over a Treasury yield or swap rate close to the loan term, while floating loans and many bank loans reset over SOFR or prime, so the public rate tape is where every quote starts. On October 22, 2026 the 10-year Treasury yield was 4.96%.
Rate tape, Federal Reserve Bank of St. Louis (FRED) series pages:
5-year Treasury, constant maturity (FRED DGS5, observation 2026-10-22): 4.78%
7-year Treasury, constant maturity (FRED DGS7, observation 2026-10-22): 4.86%
10-year Treasury, constant maturity (FRED DGS10, observation 2026-10-22): 4.96%
Secured Overnight Financing Rate (FRED SOFR, observation 2026-10-23): 3.92%
Bank prime loan rate (FRED DPRIME, observation 2026-10-21): 7.00%
Each lender adds its own spread, and the spread is where stabilization shows up: a longer, cleaner trailing record and a lease schedule without a cliff give a lender fewer reasons to widen it. SBA's 504 program states its own peg, setting the debenture rate at an increment above the current market rate for 10-year U.S. Treasury issues. Treat these figures as reference points, not quotes, and compare quotes taken on the same date.
Are banks easing or tightening on stabilized commercial loans?
Banks were easing at the margin on finished, income-producing property in mid-2026, because in the Federal Reserve's July 2026 Senior Loan Officer Opinion Survey, covering the second quarter, moderate and modest net shares of banks reported easing standards on loans secured by nonfarm nonresidential and multifamily properties, while construction and land standards held basically unchanged.
The same survey, last updated August 3, 2026, found demand for nonfarm nonresidential and multifamily loans basically unchanged, and banks described the level of their standards as at the tighter end of the range since 2005 for every loan category except commercial and industrial loans. Read together: easier at the margin for finished buildings, from a level that is still tight.
How do lenders check that occupancy has really held?
Lenders check that occupancy has held by measuring it over a trailing window rather than on one day, counting only tenants who are in place and paying, and comparing in-place rents with the market; one agency multifamily guide requires 85% physical and 70% economic occupancy on the commitment date and for the preceding 3 months.
That guide's counting rules are worth copying even for office, retail or industrial property, because they show how an underwriter discounts a rent roll. Only tenants who physically occupy the unit and have commenced paying rent count toward physical occupancy. A month-to-month tenant who started on a standard lease of at least 6 months can count, and management, employee, maintenance and model units can be included only to the extent usual and customary for stabilized properties in the market.
Small loans get a stricter test. For properties with 10 or more units, the guide's small mortgage loan section requires at least 90% physical occupancy by qualified occupants for the 90 days immediately before the commitment date. For properties with fewer than 10 units, it allows no more than 1 vacant unit at commitment and an average occupancy of at least 90% over the prior 12 months.
Agency minimum, standard loans: 85% physical and 70% economic occupancy, on the commitment date and for the preceding 3 months
Agency minimum, small loans with 10 or more units: 90% physical occupancy for the 90 days before commitment
Agency minimum, small loans under 10 units: no more than 1 vacant unit, and 90% average occupancy over the prior 12 months
For commercial property the same logic runs through the rent roll: how much rent rolls during the loan term, whether in-place rents sit above market, and whether free rent flatters the trailing twelve months. Banks, life companies and CMBS lenders set their own thresholds, so a clean trailing year and a lease schedule without a cliff travel across all of them.
What if the property is not quite stabilized yet?
If the property is not quite stabilized, a permanent lender will usually size on today's income, hold back proceeds, or decline, so the practical choices are to wait for a longer trailing record, take a short-term bridge loan to finish lease-up, or accept a smaller permanent loan sized on current numbers.
The trade-off between those paths is carrying cost against loan size. Bridge loan versus permanent financing walks the decision, and the appraisal rule above explains why waiting can pay: the deductions for leasing commissions, rent losses and tenant improvements apply because a building has not reached stabilized occupancy, so they fall away once it has.
How do you get a permanent loan placed on a stabilized commercial property?
To get a permanent loan placed on a stabilized commercial property, send one complete package, with the trailing-12 operating statement, a current rent roll and the lease file, to a brokerage that puts it in front of several lender types at once, so each prices the same income. Send your stabilized property for review.
YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Why we put the brokerage route first: a stabilized property is the one file every lender type above can quote, and those lenders disagree on leverage, recourse, prepayment and how they read the same rent roll. YieldStack's software matches the property against a catalog of 20,000+ loan programs. Human brokers then structure the request, negotiate for the borrower and carry the deal toward closing.
The intake is a 5-minute submit, and one submission returns a median first offer in under an hour, from an institutional lender. 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.
What to send with a stabilized permanent loan request:
Trailing-12 operating statement: month by month, with concessions and one-time items shown separately
Rent roll: current, with lease start and expiry dates, in-place rent and any free-rent periods
Occupancy history: physical and economic occupancy by month across the trailing window the target lenders test
Rollover schedule: for commercial property, lease expirations by year through the proposed loan term
Existing debt: payoff amount, maturity date and prepayment terms on the current loan
The bottom line
Stabilized property opens the full set of permanent lenders, and each prices the same trailing income differently. Banks hold the most commercial mortgage debt, life insurers and CMBS compete for well-leased income, agency lenders answer the apartment question with written occupancy floors, and SBA serves the business that occupies its building. Prove stabilization with a trailing record first, then put the file in front of every channel at once. YieldStack, which publishes this guide, is our pick for running that comparison.