How to Prepare a Commercial Real Estate Loan Request Package

The executive summary is the first thing an underwriter reads and often the only thing a credit committee reads in full. It should state the property, the request, the current financial condition, the plan, and the exit, all in a page or less. A lender forms an initial view of the deal from this page before opening a single financial statement.

Write it last, after every other exhibit is finished, so every number in the summary matches the detail behind it. Inconsistencies between the summary and the backup financials are one of the fastest ways to lose an underwriter's confidence in the rest of the package.

The sources and uses table reconciles where every dollar in the deal comes from and where it goes: purchase price or payoff, closing costs, renovation or construction budget, interest reserve, and any other reserve, against the requested loan, sponsor equity, and any subordinate capital like mezzanine debt or preferred equity.

As an illustration, a $15 million acquisition with a $2 million renovation budget and $500,000 in closing costs and reserves totals $17.5 million in uses; if the lender is sizing a $12 million bridge loan, the sources side needs to show the remaining $5.5 million in sponsor equity or subordinate capital, not a gap the underwriter has to ask about.

A current rent roll shows unit or suite mix, in-place rent, lease expiration, and any concessions or arrears, and it should be dated within 30 days of submission. Trailing twelve months of income and expense statements, often called a T-12, let the lender calculate trailing net operating income and compare it against the pro forma the sponsor is presenting.

When the property recently changed hands or management, attach the prior owner or manager's financials as well, since a lender comparing two operating histories side by side can better judge which parts of the trend reflect the real estate and which reflect a change in how it was run.

The pro forma projects income and expenses after the business plan is executed, and lenders test it against market comparables rather than accepting it at face value. Rent growth assumptions, expense ratios, and vacancy factors should each cite a source, whether that is a market report, comparable leases, or the sponsor's own operating history on similar assets.

A pro forma that assumes rents 30 percent above the best comparable in the submarket, with no explanation, invites the underwriter to discount the whole package rather than just that line item.

A line-item budget with hard and soft costs, a contingency line typically 5 to 10 percent of hard costs, and a draw schedule tied to milestones tells the lender the sponsor has actually costed out the plan rather than estimating it. Include bids or contracts where available, and note which costs are already committed versus estimated.

A budget presented as a single lump sum, without a breakdown by trade or scope, reads as unfinished to an underwriter and usually generates a request for more detail before the file moves forward.

The sponsor bio should cover relevant transaction experience, especially in the same asset class and market, and state each principal's role: managing member, key principal, or guarantor. The schedule of real estate owned lists every property the sponsor controls, with basis, debt, and current status, so the lender can see total exposure and track record together.

Lenders read the REO schedule for patterns: consistent hold periods and successful exits build confidence, while a schedule with several properties in distress or past due invites closer questions about the current request.

Even though the lender orders the appraisal, property condition assessment, environmental report, and title work directly, the package should flag anything those reports are likely to surface: a known environmental condition from a prior Phase I, deferred maintenance items, or a title exception. Surfacing it first reads as transparency; having the lender find it independently reads as an omission.

A short disclosure memo attached to the package, describing any known issue and the sponsor's plan to address it, gives the underwriter context before the formal report lands and generally keeps the conversation moving forward rather than restarting it.

An underwriter does not read a request package front to back once; each document answers a specific question, and lenders often jump straight to the exhibit that answers the question they are asking at that moment. The executive summary answers what the deal is and how it gets repaid. The sources and uses table answers whether the capital stack actually closes the gap between total cost and the requested loan.

The rent roll and T-12 answer what the property is actually producing today, independent of any projection, which is why an underwriter often checks those two documents against each other before reading the pro forma at all. The pro forma answers what the property could produce once the plan is executed, and it only carries weight once the underwriter trusts the trailing numbers behind it.

The sponsor bio and REO schedule answer a different question entirely: not what the deal will do, but whether this particular sponsor is likely to execute the plan as described. A lender who has doubts about execution will size the loan more conservatively even when the property-level numbers are strong, which is why sponsor materials deserve the same care as the financial exhibits.

Organizing the package with a table of contents and clearly labeled exhibits, rather than a single undifferentiated file, saves an underwriter time and signals a sponsor who runs an organized process. A typical order moves from the summary and deal-level documents to the property financials, then the plan and budget, then sponsor materials, then supporting exhibits.

That order roughly follows how a lender actually underwrites: confirm what the deal is and how it repays, verify current performance, test the plan against the budget, and finally assess whether the sponsor can execute it.

The most frequent mistake is submitting a package with numbers that do not tie together, a pro forma that does not match the sources and uses, or a rent roll total that does not match the T-12. Each inconsistency generates a follow-up question, and follow-up questions add days.

The second is omitting the sponsor's REO schedule or bio until asked. Lenders underwrite the sponsor as much as the asset, and a package that treats sponsor materials as an afterthought signals the deal itself may be underprepared too.

H Equities evaluates loan request packages for first mortgage bridge loans from $5 million to $50 million, mezzanine loans from $3 million to $15 million, preferred equity from $3 million to $15 million, and co-GP equity from $1 million to $4 million, across asset classes and markets nationwide. A complete package, built along the lines above, is the fastest way to get a substantive response.