Conduit, bank or agency?
A conduit loan gives you fixed-rate, non-recourse money on almost any income property, in exchange for a rigid prepayment regime and a servicer instead of a banker. A bank sets its own terms loan by loan, within supervisory limits, and keeps the loan on its books. Fannie Mae and Freddie Mac lend up to 80% of value, on apartments and a few housing types only. Here is how the terms compare, each from its own published source.
| Conduit (CMBS) | Bank | Fannie Mae / Freddie Mac | |
|---|---|---|---|
| Property types | Office, retail, hotel, industrial, apartments, self storage, mixed use, manufactured housing | Any, by bank policy | Multifamily and related housing |
| Term | 5 or 10 years. In the last year, 817 five-year and 228 ten-year loans in public trusts | Set by each bank; no federal rule | Fannie: 5 to 30 years. Freddie fixed: 5 to 10 years (up to 30 if not securitized) |
| Loan-to-value | Median 63.8% LTV; 90% of loans at or under 71.0% | Supervisory limit 85% LTV on improved property; banks set their own lower limits | Fannie: up to 80% LTV. Freddie: 75% to 80% amortizing, 65% to 70% full-term interest only |
| Coverage | Median 1.52x; 90% of loans at or above 1.28x | Set by each bank; no federal minimum | Both: 1.25x minimum on the published term sheets (Freddie tests interest-only loans on an amortizing payment) |
| Interest only | 82% of last year's loans were interest only for the full term | By bank policy | Available, at a lower LTV when full-term (Freddie) |
| Recourse | Non-recourse with carve-outs: full recourse for bankruptcy and prohibited transfers; losses for fraud, misapplied rents, environmental breaches, waste | Set by each bank | Non-recourse with standard carve-outs (Fannie: most loans over $750,000) |
| Prepayment | Lockout, then defeasance or yield maintenance; open at par for the last few payments (2 to 7 in BMO 2026-C15) | Negotiated | Fannie fixed: greater of 1% or yield maintenance, then 1% until about four months before maturity. Freddie: yield maintenance until securitized, then lockout and defeasance; last 90 days open |
| After closing | A master servicer and, if trouble starts, a special servicer acting for bondholders under the pooling agreement | Your lender | A Fannie DUS lender or Freddie Optigo servicer |
Sources: conduit figures are medians and percentiles of 1,045 loans originated October 2025 to October 2026, from the trusts' SEC ABS-EE filings (detail); recourse from the BBCMS 2026-5C43 prospectus, Annex D-1; prepayment from the BMO 2026-C15 prospectus. Bank: 12 CFR Part 34, Subpart D, Appendix A (also 12 CFR Part 365, Appendix A). Fannie Mae: Conventional Properties term sheet and the Multifamily Selling and Servicing Guide, sections 213.02 and 213.03 (effective September 28, 2026). Freddie Mac: Optigo Fixed-Rate Loans term sheet (April 2026). All read October 24, 2026.
When a conduit loan is the right call
The property is not apartments, or you want more than a bank will lend without your personal guarantee, and you expect to hold to maturity. A conduit lender sizes the loan on today's stabilized income and fixes the rate. While the loan performs, you deal only with the master servicer.
When it is the wrong call
You may sell or refinance early. Prepaying a conduit loan in the middle of its term costs yield maintenance or a defeasance, and when Treasury yields have fallen below your coupon that bill can be large: on a $20 million loan at 6.5% with five years left, the October 23, 2026 curve puts yield maintenance at $1,491,973, 7.5% of the balance. Price it before you sign. A conduit loan is also the wrong tool for a property that needs to change: a lease-up, a repositioning, a construction completion. The loan is sized on today's cash flow and the documents leave little room to renegotiate.
Why banks lend less on commercial property than the limit allows
Bank examiners screen for concentration. Under the 2006 interagency guidance, a bank whose commercial real estate loans reach 300% of its total capital, after growing 50% or more in 36 months, or whose construction and land loans reach 100% of capital, draws closer supervisory attention (71 FR 74580). A bank near those lines has a reason to say no to a loan it would otherwise make, and a conduit lender has no such limit.
Not sure which fits?
Send the property to the Janover Capital desk. We will tell you which kind of lender fits and take it to them.