Commercial Real Estate Loans in Indiana Now Nov2025

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

Indiana’s resilient, expanding economy continues to draw investors to its diverse selection of commercial properties. Whether you’re looking to acquire an office building in downtown Indianapolis, construct a mixed-use development in Carmel, or refinance a retail center in Fort Wayne, understanding your commercial real estate loan options in Indiana is crucial for success in 2025.

2025 Indiana Market Overview

Despite fluctuating national headlines, Indiana’s commercial real estate (CRE) market shows steady job growth, attractive capitalization rates, and a healthy pipeline of developments across the state. Key commercial areas include:

• Downtown Indianapolis: The state’s commercial engine with a robust office, retail, and multifamily inventory.
• Keystone at the Crossing: High-end retail and office development seeing continued demand from tech and finance firms.
• Fort Wayne Central Business District: Revitalized CBD with new mixed-use and multifamily investments.
• South Bend Medical Corridor: Driven by healthcare, medical office, and biotechnology tenants.
• Evansville Riverfront: Focus on hospitality, logistics, and industrial redevelopment.
• Carmel Midtown: Major multifamily and mixed-use growth in suburban Indianapolis.
• Lafayette/West Lafayette: Student housing and life sciences investments anchored by Purdue University.
• Fishers Innovation District: Booming flex, office, and multifamily sector supporting tech startups.

Commercial Mortgage Options for Indiana Investors in 2025

For most property investors, commercial mortgages are the backbone of their CRE financing strategy. These fixed or variable rate loans enable the purchase, refinancing, or cash-out of properties such as office buildings, medical offices, industrial warehouses, retail centers, and more.

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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Page 1 of 5

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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Notable Indiana Commercial Mortgage Lenders

• Old National Bank: Indiana’s largest locally headquartered commercial lender. Specializes in local market underwriting.
• First Merchants Bank: Strong in office, retail, and industrial deals across Central and Northern Indiana.
• Lake City Bank: Focuses on small-to-midsize loans for retail, hospitality, and multifamily.
• Horizon Bank: Creative financing options for value-add projects and mixed-use properties.
• PNC Real Estate: National reach with a major Indiana presence and specialty in large projects.

2025 Indiana CRE Mortgage Highlights

• Loan Amounts: $500,000 up to $50 million+, depending on property/borrower strength.
• Typical LTV: Up to 75% for stabilized properties.
• Rates: Fixed rates start near 6.25–7.00% (June 2025), with variable options available.
• Terms: 5 to 25 years, amortized up to 30 years.
• Eligible Properties: Office, retail, shopping centers, self-storage, industrial, hotels, and more.

Other Commercial Loan Types Available in Indiana

Bridge Loans

Short-term, interest-only loans to temporarily finance an acquisition or reposition while securing long-term permanent financing.

Construction Loans

Specialized financing for ground-up developments or major renovations, with draw schedules aligned to construction milestones.

Multifamily Loans

✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

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Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

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Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

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For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

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What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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Dedicated programs for purchasing, refinancing, or rehabbing apartment buildings (5+ units), including Fannie Mae, Freddie Mac, HUD FHA, and local bank products.

Step-by-Step Commercial Mortgage Application Process in Indiana

1. Property and Market Analysis: Clearly identify the asset type and submarket (e.g., retail in Fishers Innovation District).
2. Loan Term Selection: Decide on length (5, 7, 10, 20 years) and fixed or floating rate.
3. Engage with a Local Lender/Broker: Approach Indiana-based banks such as Old National or First Merchants for pre-qualification.
4. Document Submission: Prepare financial statements, rent rolls, operating history, business plan, and property details.
5. Initial Underwriting & LOI: Lender reviews materials and issues a Letter of Intent (LOI) outlining terms and conditions.
6. Appraisal & Environmental Study: Third-party reports (MAI appraisal, Phase I ESA) are typically required.
7. Final Underwriting & Approval: Lender completes due diligence; loan is formally approved by committee.
8. Loan Closing: Sign loan docs, fund escrow, and transfer proceeds—congratulations, your CRE loan is closed!

Success Stories: Indiana Commercial Property Financing in Action

1. Keystone Office Tower Acquisition

✅ Real Estate Investor Resources

• AirDNA (Short-Term Rental Data)
  https://www.airdna.co

• Rentometer (Rent Comps)
  https://www.rentometer.com
• Zillow Research & Data
  https://www.zillow.com/research

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

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If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

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Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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Borrower: Experienced Indianapolis investor.
Loan: $4.2M commercial mortgage from Old National Bank (70% LTV, 10-year fixed at 6.5%).
Result: Repositioned and leased up to national accounting firm, achieving 9% cash-on-cash return in the first year.

2. Fort Wayne Multifamily Portfolio Refinance

Borrower: Regional real estate group.
Loan: $5.5M multifamily loan through Freddie Mac Small Balance Loan program (75% LTV, 10-year fixed at 6.35%, interest-only first 3 years).
Result: Extracted capital for further acquisitions and improved DSCR to 1.45x after renovations.

3. Evansville Retail Center Bridge Financing

Borrower: Local partnership.
Loan: $1.8M bridge loan via Horizon Bank (24 months interest-only, 8.25% rate, 65% LTV).
Result: Funded tenant improvements and secured two new leases, enabling a permanent refi at a higher valuation.

4. Carmel Midtown Mixed-Use Construction

Borrower: Developer with strong portfolio.
Loan: $7.3M construction loan from PNC Real Estate (60% LTC, floating rate at SOFR+2.65%).
Result: Project finished on-time, 70% leased at certificate of occupancy, setting new comp for the area.

Why Invest in Indiana CRE in 2025?

• Steady Population Growth: Supports multifamily, retail, and medical office demand.
• Affordable Entry Points: Lower cost basis than coastal peers, increasing cash-on-cash returns.
• Diversified Economy: Major sectors in manufacturing, logistics, higher education, and healthcare.
• Pro-Business Climate: Favorable tax policies and streamlined regulatory environment.

Indiana CRE Lending Outlook: 2025 and Beyond

Many lenders in Indiana have responded to 2025’s market dynamics by slightly tightening underwriting but expanding their lending to well-located and well-sponsored projects. Key tips for borrowers:

• Seek local lenders who know the market’s nuances, especially for non-institutional deals.
• Be prepared for comprehensive documentation and higher scrutiny on cash flow projections.
• Capitalize on opportunities in up-and-coming submarkets—Fishers, Midtown Carmel, and Lafayette/West Lafayette are seeing activity from institutional and independent investors alike.

Conclusion: Secure Your Commercial Real Estate Loan in Indiana

The Indiana commercial real estate market in 2025 presents robust opportunities for investors of all sizes. By leveraging tailored commercial mortgage products and working with experienced in-state lenders, you can finance office, retail, mixed-use, and multifamily properties with confidence. Stay proactive, know your options, and partner with Indiana’s top lenders to maximize returns in the Hoosier State this year and beyond.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

Contact GHC Funding Today. Main: 833-572-4327 Email: sales@ghcfunding.com

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