Commercial Real Estate Loans in Indiana: The Comprehensive 2025 Guide

Indiana’s thriving economy and strategic location in the Midwest make it a steady and lucrative market for commercial real estate investors. With revitalized urban cores like downtown Indianapolis, expanding logistics hubs, and booming suburban corridors, the Hoosier State continues to offer exceptional opportunities across all asset types – from multifamily properties to modern warehouses, office parks, and retail plazas. In 2025, understanding the evolving landscape of commercial mortgages in Indiana is essential for investors aiming to maximize returns and minimize risk.

Indiana’s Commercial Real Estate Market in 2025: Key Areas to Know

Investors in Indiana should pay close attention to several high-demand districts and municipalities:

• Downtown Indianapolis: Ongoing redevelopment, with Class A office towers, luxury mixed-use projects, and boutique hotels.
• Fishers & Carmel: Suburban powerhouses for office headquarters, medical campuses, and retail centers.
• Fort Wayne Innovation District: Tech, medical, and educational corridors in northeastern Indiana.
• Evansville Riverfront: Industrial and logistics warehousing, benefiting from river and rail access.
• South Bend–Mishawaka: University-driven housing and emerging life sciences clusters.
• Gary/Portage: Industrial parks and e-commerce fulfillment centers leveraging proximity to Chicago.
• Bloomington Downtown: Student housing and adaptive reuse projects.
• Terre Haute: Growth in manufacturing and specialty hospitality assets.

Types of Commercial Real Estate Loans Available in Indiana (2025 Focus: Commercial Mortgages)

Choosing the right financing product can make or break your investment. In Indiana, leading commercial mortgage options include:

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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• Permanent Commercial Mortgages: 5-15 year terms, amortized over 20–30 years, ideal for stabilized retail, office, multifamily, and industrial properties.
• SBA 504 & 7(a) Loans: Excellent for small businesses acquiring owner-occupied buildings or refinancing existing debt. 10–25 year terms, up to $5.5 million.
• CMBS Loans: Non-recourse fixed-rate loans, typically $2M+, structured for stable assets in major urban centers.
• Portfolio Lender (Bank) Loans: Flexible terms, locally underwritten, often with lower prepayment penalties and recourse.

Other Loan Types

• Bridge Loans: Short-term financing (6–36 months) for value-add or repositioning projects.
• Construction Loans: Financing for ground-up development, with disbursements based on construction milestones.
• Multifamily Financing: Agency loans (Fannie Mae/Freddie Mac) for apartment buildings, competitive rates for stabilized assets.

Top Commercial Lenders Operating in Indiana (2025)

Securing the right lender is critical to obtaining favorable terms. The following institutions are active and well-respected in Indiana’s commercial finance market:

1. Old National Bank: Indiana’s largest bank, known for local expertise and robust CRE lending, particularly for $1–$25M deals.
2. Centier Bank: Providing portfolio commercial mortgages, bridge loans, and construction loans across northern Indiana.
3. Fifth Third Bank: Offers a full suite of permanent and SBA financing for mid-market transactions, especially in Indianapolis and Fort Wayne.
4. Mesirow Financial: Leading CMBS/conduit and multifamily agency lender for larger projects across primary markets.
5. Pinnacle Financial Partners: Expanding their Indiana footprint, specializing in complex projects and ground-up development financing.
6. Chase Commercial Banking: Nationwide reach with Indiana-specific teams for large-scale and institutional projects.

Indiana Commercial Mortgage Terms and Rates for 2025

• Interest Rates: Fixed rates from 6.4%–7.7% (as of Q1 2025), depending on property type, location, and sponsor strength.
• Loan-to-Value (LTV): Up to 75% for stabilized multifamily, 65-70% for retail and office; industrial may reach 80% with strong sponsors.
• Amortization: Most loans amortize over 20–30 years (with some interest-only periods available for highly qualified borrowers).
• Recourse: Full or limited recourse is standard; non-recourse by exception for institutional-grade assets or CMBS deals.
• Minimum Loan Amounts: $500,000 and up; small balance programs sometimes available for $250,000+.

Step-By-Step Indiana Commercial Property Loan Application Process (2025 Edition)

1. Prepare Documentation: Business entity docs, previous 2–3 years’ financials, property rent roll & leases, project plans, and sponsor resumes.
2. Select Your Lender: Compare terms from at least three local/regional lenders. Engage with a commercial mortgage broker for more options.
3. Pre-Qualification or LOI: Submit a loan request summary; receive indicative interest rate and terms (Letter of Intent).
4. Full Application: Work with your lender to fill out detailed loan forms and provide all supporting documents.
5. Underwriting & Appraisal: Lender conducts site inspection, full property appraisal, and in-depth financial review. Expect due diligence fees ($5k–$15k).
6. Commitment Letter: If approved, sign a commitment to lock rate and terms, then pay any remaining origination fees.
7. Closing: Legal documents executed, funds disbursed via title company. Most Indiana closings conclude in 45–70 days.

Success Stories: Indiana Commercial Real Estate Loan Closings in 2024–2025

• Carmel Office Acquisition: $3.2M permanent commercial mortgage with Fifth Third Bank for a 32,000 sq. ft. Class B office building. 10-year term, 6.5% fixed rate, 25-year amortization.
• Indianapolis Retail Plaza Refinance: $1.1M SBA 504 loan through Old National Bank. 20-year term, 10% down, rate locked at 6.15%.
• Evansville Warehouse Purchase: Mesirow Financial closed a $5.8M CMBS loan (non-recourse), 70% LTV, 10-year term, 2 years interest-only.
• Bloomington Student Housing Construction: Centier Bank originated a $4.5M construction-to-perm loan for a 58-unit student housing project, interest reserve during construction, 25-year permanent phase.
• Gary Flex-Industrial Bridge Loan: Pinnacle Financial Partners funded a $2.4M bridge loan, 18 months, 7.9% interest, value-add repositioning strategy.

Tips for Maximizing Success With Indiana Commercial Mortgages in 2025

• Structure your deal to match lender appetite for location, property type, and business plan.
• Demonstrate sponsor experience, healthy liquidity, and a strong management team.
• Shop lenders based on your asset class (multifamily, retail, industrial) and desired leverage.
• Factor in all closing costs (legal, appraisal, origination fees) when setting your budget.
• Stay aware of emerging districts—opportunities abound in smaller metros and university towns.

Ready to Invest in Indiana Commercial Property?

The 2025 Indiana commercial real estate landscape is rich with opportunity for informed investors. Whether you’re targeting the vibrant submarkets of Indianapolis, the innovation-driven university hubs, or growing logistics corridors, choosing the right commercial mortgage lender and loan product is essential. Leverage Indiana’s network of trusted banking partners and enjoy solid cash flows and long-term appreciation in one of the Midwest’s most stable markets.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

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

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