Fetti Financial Services
We Do Money…
Fetti Financial Services
We Do Money…
Lender & broker · Fetti Financial Services LLC · NMLS #2267023
A commercial real estate loan in Florida is underwritten against the building first: its leases and the income they produce set what a lender will advance and on what structure, and your balance sheet stands behind that rather than in place of it. Office, retail, industrial, mixed-use, multifamily — investment or owner-user, the business property is the file. Fetti Financial Services is a licensed mortgage lender and broker, which on a commercial deal means placing your file with the lender whose credit box it genuinely fits, then getting it funded.
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Commercial is not one market. The same Florida business property gets a different answer from each kind of desk.
Banks and portfolio lenders keep the loan, so they weight the relationship — deposits, liquidity, your record in that submarket — and are the most flexible on an odd building, the least forgiving of a thin guarantor. Credit unions are that desk at smaller scale, often patient with an owner-user. SBA lenders are owner-user only and underwrite the operating company as hard as the real estate. Agency small-balance multifamily programs begin at five units — below that a rental is financed as residential investment, usually on a DSCR loan. Agency paper is the most standardized capital for a stabilized apartment property, the most rigid about anything that is not one. Life companies want well-located, well-leased assets and weight the real estate over the sponsor. Conduit lenders — CMBS — pool and sell their loans, so the note is standardized, commonly non-recourse, and every later request goes to a servicer with no discretion. Debt funds are built for speed, underwrite a business plan rather than an operating history, and price for that risk.
So ask which side your deal wins on. A property-strong file — stabilized, well leased, unremarkable — is what the conservative desks compete for; a debt fund would only sell it flexibility it will not use. A sponsor-strong file — a capable operator with a building in transition — often needs interim money to get there, which is a bridge loan; past that it belongs with a bank that already knows you, or a fund willing to underwrite the plan. The wrong desk does not simply decline; it declines slowly, after third-party reports you already paid for.
The first difference between two files quoted alike is recourse. On a recourse loan the guarantors stand behind the debt personally; on a non-recourse loan the lender's remedy is the property — but non-recourse is never absolute. Every non-recourse note carries bad-boy carve-outs: fraud, misapplying rents or insurance proceeds, transferring or further encumbering the property without consent, environmental misstatement, often a voluntary bankruptcy. Trip one and the loss, sometimes the whole debt, becomes personally recourse. Read that schedule as closely as the pricing, and read who is named on it: carve-outs follow the signature, not the entity.
The second is maturity. A commercial note's amortization schedule commonly runs far longer than the note itself, so a balance comes due at maturity by design, not as a defect. Your hold plan and your maturity are one conversation: a plan running through a lease-up or a repositioning needs a maturity with room to reach the other side of it, because refinancing into whatever market exists on that date is the risk the structure hands you.
The third is what leaving early costs, and commercial notes penalize prepayment by structure rather than a flat fee. A step-down declines as the loan seasons. Yield maintenance makes the lender whole for the income it expected. Defeasance, standard on conduit paper, swaps securities in for the collateral so the payments continue without you — its own transaction, with its own cost and calendar. Some structures instead let a buyer assume the loan — on the right sale, worth more than any of it. Structure, not pricing, decides whether you can sell in year three of a hold, so ask for that language at term sheet, not at closing.
Coverage measures annual net operating income — rent less vacancy and the real cost of running the building, before debt service and capital projects — against annual debt service. No lender takes your NOI as presented. Underwriting applies a vacancy factor to a fully leased building, charges a management fee where you self-manage and take none, deducts a replacement reserve whether or not you fund one, and pulls light expense lines toward market. The gap between your NOI and the lender's is the deal.
Which period gets normalized is worth arguing about on a Florida asset. A trailing twelve that catches a strong season and misses a soft one flatters a seasonal asset; one that straddles a storm that interrupted its tenants understates the same building. Expect a multi-year average, or a trailing three annualized where recent months are the real story.
The leases behind that income are read just as hard: the lender is buying the rent roll as much as the building. Triple net, modified gross and full service divide taxes, insurance and common area maintenance very differently, so two buildings with identical rent rolls are not the same asset when one passes those lines through and the other absorbs them. A lease expiring early in the loan's life is the risk it looks like, and one tenant paying most of the rent is a different credit from eight each paying a share.
Owner-occupied here means your company occupies the space. It is business-purpose credit, not a consumer mortgage, and it is underwritten twice: once as real estate, once as the business that pays the rent. Expect a global cash flow review — business returns and interim statements alongside the property file, the rent your company would pay itself eliminated so it is not counted twice, and whatever remains has to service the debt. A company with real earnings can support a building that market rent alone would not; one thin year can sink a clean property.
If your company will occupy at least 51% of the space, SBA 7(a) and 504 are available to owner-users. The trade is process: an SBA file asks for more documentation and a longer calendar than conventional commercial credit. If your closing date is tight, say so before the file is placed.
Property taxes are the line most commercial projections carry over from the seller unchanged, and it is the one least likely to survive the sale. Florida assessments reset toward market value when a property changes hands, and the year-over-year cap that limited the seller's increases resets with the transfer — so the assessment behind the operating statement you were handed is not the assessment behind your first bill. Underwrite the reset, and confirm the mechanics for your parcel with the county property appraiser rather than working from the current bill.
Then read the non-ad-valorem section of that bill separately from the millage. Drainage, fire, lighting and community development district assessments are billed there, and on a commercial deal the question is rarely how large they are — it is whose expense they become. A triple net lease passing through “real property taxes” does not automatically reach a district assessment or a special levy: some leases name them, some carve out anything capital in nature, and some are silent. Silence is how a landlord ends up absorbing a line he underwrote as a pass-through. Test each lease's clause against the actual bill before you close.
Where the pass-through does reach them, that cost lands on tenants who agreed their rent before the sale — which makes it a renewal risk, and your lender prices renewal risk. Florida also applies its own treatment to rent paid for commercial space, and the rules there have moved more than once in recent years; confirm the current position with your CPA or the Department of Revenue for the periods you are underwriting rather than carrying a figure across from an older deal.
A commercial property policy is written against total insured value, and the named-storm deductible is generally a share of that value rather than a flat sum, so it scales with the building. Lenders read the coinsurance clause closely — an agreed-value endorsement is the usual way that penalty comes off the table — and they require business income or loss-of-rents coverage with an indemnity period long enough to carry debt service through the months a damaged building earns nothing.
On the binder they want the named insured matching the entity taking title, the mortgagee clause, the deductible stated as its percentage, and the business income limit with its indemnity period. Work those with a licensed Florida commercial agent early: the premium you land on lands in operating expenses, operating expenses set NOI, and NOI is what the debt is measured against.
Most delay on a commercial file is documentary, and these items do not arrive at the same speed. Start the slow ones the week you go under contract.
You produce: the entity taking title and its ownership breakdown, matching the name on the purchase contract; a personal financial statement and schedule of real estate owned for each guarantor; business returns and an interim profit and loss if the business will occupy the building; and the equity you are bringing.
The seller produces: operating statements for the recent full years plus a current-year interim; the rent roll (tenant, term dates, base rent, escalations, options); every executed lease and amendment; service contracts; and the complete tax bill including its non-ad-valorem section.
The tenants produce the slowest items — estoppel certificates confirming their terms are what you say they are, and, where the lender requires them, subordination, non-disturbance and attornment agreements. Both come through the seller, and the signers have no reason to hurry.
The association produces, on a condominium unit or inside an owners' association (common in office and retail parks): declaration, budget, reserve position, master insurance certificate, assessment history, and any reciprocal easement governing parking, access and signage.
The lender orders, at your expense: the appraisal, an income-approach second opinion on your own operating statement; a Phase I environmental site assessment; an ALTA survey; and on many assets a property condition assessment. Environmental most often moves the closing date — Florida's commercial sites often carry a prior-use history — fueling, dry cleaning, automotive service — and a recognized condition escalates a Phase I into a Phase II, a new scope of work with its own vendor and calendar.
All financing is subject to the lender's underwriting and approval. Not all applicants or properties qualify.
Office, retail, industrial, mixed-use, and multifamily — both owner-occupied and investment. Tell us the deal and we'll match the right program.
Often 20–30% for investment, less for SBA owner-occupied deals. We'll structure for the lowest cost of capital that fits.
Yes — if you'll occupy 51%+ of the space, SBA 7(a)/504 are available to owner-users. Tell us the deal and we'll tell you whether it's a fit.
It turns on how the lender classifies the collateral. By convention one to four units is residential collateral financed from a lease and a rent figure; anything larger is underwritten from the property's own operating statements. Six units generally lands on the commercial side, which changes the document package more than your eligibility.
It underwrites differently. With little in-place income there is no operating statement to normalize, so the file moves onto the sponsor, the equity and a lease-up plan tested against real market rents and leasing costs — and the lenders who do that work are a narrower group. Bring signed letters of intent and a defensible leasing budget.
Usually not directly: title is typically held in an entity, and business-purpose credit is generally not furnished to the consumer bureaus. A personal guaranty is still a real obligation — you disclose it on your personal financial statement, and the next lender counts it in global cash flow.
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