CMBS Loan

A commercial mortgage-backed security loan — bond-financed and typically with stricter prepayment terms.

A CMBS (commercial mortgage-backed security) loan is a non-recourse mortgage that is securitized and sold to bond investors. For mobile home parks, CMBS loans offer competitive interest rates and high leverage but come with two important constraints: defeasance prepayment penalties (which can be expensive if the operator wants to refinance early) and standardized underwriting that doesn't accommodate the lot-level nuance of MHP. CMBS is most commonly used for larger acquisitions where agency limits don't fit and the operator can absorb the prepayment friction.

Related Terms

Agency Loan

A loan backed by Fannie Mae or Freddie Mac — the most common financing for stabilized parks.
Bridge Loan

Short-term, higher-rate financing used to acquire and stabilize a park before a longer-term refi.

See CMBS Loan in action.

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