Fundamentals of Credit Policy for Commercial Real Estate Lending
September 9 2020 16:00 - 17:00 UTC
Right or wrong, credit policy is the organization’s rule book for its credit risk management strategy, and it also reflects the organization’s credit culture. Both the market and the regulatory agencies expect the credit policy to be accurate, current, and succinct so that both line and credit have unambiguous and clear direction on how to identify, evaluate, underwrite, approve, book and monitor creditworthy clients.
Commercial real estate lending is a specialized type of lending that requires special attention to types of loans, borrowers, and underwriting as well as guidance for its support functions, specifically, construction loan administration.
Areas to be discussed include:
- Borrowers: Real estate developers and investors (REDI), Co-REDI borrowers (e.g., law firm that decides to build an office building for investment purposes), owner-occupied (e.g., law firm builds office building for its own use)
- Guarantors: guarantors vs. sponsors, burn-off guarantees
- Collateral issues: desirable types of real estate collateral, riskier types
- Types of Loans, term lending, construction lending, high-volatility acquisition-development-construction (HV-ADC)
- Concentration limits on total REDI borrower exposure, single project, single A&D project
- FDICIA LTV limits on real estate
- Project underwriting requirements: term, LTV, DSC, survey, appraisal, environmental risk management, Content expectations of regulatory agencies
- Construction loan administration roles and responsibilities
Anyone who is directly or indirectly involved in lending to, evaluating, underwriting, approving or monitoring CRE borrowers:
- CRE lenders
- Credit analysts
- Credit approvers
- Loan review
- Construction loan administration
- Credit risk management
- Credit risk policy
• Prerequisites: N/A • Advanced Preparations: N/A
• Course Level: Basic • Group Internet Based Training
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- Real Estate
CRE Policy Down and Dirty 09092020.pdfAttendees Only
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