Commercial Real Estate Loans in Indiana for Investors Now

Commercial Real Estate Loans in Indiana: 2025 Investor’s Guide

The Indiana commercial real estate market is surging in 2025, driven by robust industrial expansion, revitalization of downtown business corridors, and expanding suburban demand. As an investor or business owner in Indiana, understanding your commercial loan options is crucial to capitalizing on prime properties in cities like Indianapolis, Fort Wayne, and beyond. This guide breaks down types of commercial mortgages, outlines regional market trends, highlights lenders, and delivers actionable steps to secure the right financing for your next investment.

2025 Indiana CRE Market Overview

• Indianapolis Downtown District: Office conversions and tech hub activity are driving demand for flexible commercial spaces.
• Fort Wayne Northside: Industrial/logistics growth fueled by proximity to interstate corridors.
• Evansville Riverfront: Hospitality and mixed-use projects benefiting from regional visitors and economic development incentives.
• South Bend Medical Corridor: Health services expansion and supporting retail/office need creative financing solutions.
• Bloomington College District: Multifamily and student housing see healthy occupancy and rent growth.
• Lafayette Industrial Park: Manufacturing and warehouse acquisitions up due to logistical cost advantages.
• Carmel Midtown: Upscale retail, multifamily, and office properties fuel investor interest in suburban cores.

Commercial Mortgage Options in Indiana (2025 Focus)

This guide focuses on Commercial Mortgages in Indiana for 2025.

1. Conventional Commercial Mortgages

• Loan Amounts: $500,000 – $25 million+
• Uses: Office, retail, industrial, mixed-use, hospitality, some special purpose properties
• Typical Terms: 5, 7, 10, or 15 years with 20-30 year amortization
• Rates (2025): 6.25% – 8.0% fixed or adjustable
• Down Payment: 20-35% (can vary by property and lender)

2. SBA 504 & 7(a) Loans

• Government-backed programs ideal for owner-occupied real estate
• Lower down payments (as low as 10%)
• Below-market, fixed-rate options typically 6.0% – 7.5% (2025 projection)

3. CMBS Loans (Commercial Mortgage-Backed Securities)

• Non-recourse, longer-term, ideal for stabilized assets
• Loan amounts start at $2 million and up
• Relevant for high-traffic, anchor-tenant retail and hospitality sites in Indiana cities

4. Credit Union & Community Bank CRE Loans

• Strong regional presence in Indiana, personalized underwriting, and local knowledge
• Often more flexible for smaller loan requests and unique property types

Top Indiana Commercial Real Estate Lenders (2025)

• Old National Bank – Headquartered in Evansville, strong statewide CRE solutions including bridge and permanent loans.
• Horizon Bank – Notable for multifamily and owner-user commercial loans.
• STAR Financial Bank – Focused expertise on business owner-occupied properties and SBA lending.
• Lake City Bank – Leading provider for industrial, retail, and construction loans across northern Indiana.
• Chase Commercial Banking – National platform with Indiana-based officers, offering large CRE and portfolio loans.

Step-by-Step: Indiana Commercial Mortgage Application Process

1. Evaluate Your Investment: Define property type, location, and your financial goals.
2. Loan Prequalification: Meet with 1-2 Indiana-based lenders for initial terms based on credit, property, and business plan.
3. Gather Documentation:
   • Personal and business financial statements
   • 3 years business tax returns
   • Property data: purchase agreement, rent roll, operating statements
   • Third-party reports (appraisal, phase I environmental)
4. Submit Formal Application: Complete lender package and address any conditions.
5. Underwriting and Offer: Lender reviews risk, property, and your experience. Receive a term sheet or loan commitment letter.
6. Due Diligence and Closing: Legal/title work, final appraisal, insurance, and entity docs completed.
7. Funding: Funds disbursed at closing, and you take title to your commercial property.

Success Stories: Indiana CRE Loan Case Studies (2025)

• Case Study 1: Office Redevelopment, Indianapolis Corridor
  A local investor acquired a vacant office building in downtown Indianapolis for $3.1 million. Old National Bank provided a $2.4 million commercial mortgage at 6.8% fixed over a 10-year term, 25-year amortization. The borrower re-tenanted the asset with tech startups, reaching 92% occupancy within 9 months.
• Case Study 2: Multifamily Acquisition, Bloomington College District
  A partnership refinanced a 40-unit student housing property with Horizon Bank using a $2,250,000 loan (75% LTV) at 7.1% fixed, with three years interest-only followed by 27-year amortization. The flexible structure allowed renovations that increased rents 17% in one year.
• Case Study 3: Industrial Expansion, Fort Wayne Northside
  A growing logistics company secured a $1,800,000 SBA 504 loan (10% down, 25-year fully amortizing rate at 6.3%) to purchase and retrofit a 30,000 sf warehouse. STAR Financial Bank structured the conventional piece, leveraging state and federal incentives.
• Case Study 4: Retail Strip Center, Carmel Midtown
  An out-of-state sponsor used a $4.9 million CMBS loan provided via Lake City Bank’s conduit platform to acquire and reposition a suburban retail complex. The 10-year, non-recourse loan locked at 7.2% with 30-year amortization, supporting long-term value-add strategy.

Indiana CRE Loan Trends & What to Expect in 2025

• Interest rates: Modest upward pressure, but local banks remain competitive, especially for relationship borrowers.
• Debt service coverage: Underwriting focuses on 1.25x DSCR or higher, particularly for non-owner-occupied properties.
• New construction: Lenders are more selective, preferring experienced sponsors with clear exit strategies.
• Environmental due diligence: State-level incentives available for remediation in opportunity zones and former industrial sites.
• Multifamily demand: Remains strong in proximity to campuses and major employers, with local and national lenders growing allocations.

Conclusion: Get Your Indiana CRE Loan Approved in 2025

With Indiana’s diverse commercial real estate landscape, investors equipped with local market knowledge, an understanding of financing options, and strong underwriting packages are set to seize emerging opportunities. Whether you’re acquiring retail, developing multifamily, or expanding commercial operations, now is the time to engage with experienced Indiana lenders and realize your investment goals in 2025.

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

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What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

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Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

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Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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