Commercial Real Estate Loans in Indiana for Investors Now

Commercial Real Estate Loans in Indiana: Complete 2025 Guide for Investors

Commercial real estate (CRE) investment in Indiana is entering a dynamic new era in 2025. Strategic markets in Indianapolis, Fort Wayne, Evansville, and other major commercial corridors are seeing robust development, and investors are increasingly turning to specialized multifamily financing options to scale their portfolios and capture high rental demand. This definitive guide will walk you through everything you need to know about securing commercial real estate loans in Indiana for multifamily properties—from local market insights, top local lenders, to the step-by-step application process and key success stories in the Hoosier State’s thriving commercial landscape.

Indiana’s Commercial Real Estate Market in 2025

Indiana’s commercial real estate market continues to grow, buoyed by resilient economic fundamentals, attractive cap rates, and expanding employment hubs. The multifamily sector, in particular, is seeing elevated demand across both urban and suburban districts. Notable areas fueling this growth include:

• Indianapolis Downtown Mile Square: The central business district is experiencing a wave of mixed-use and multifamily developments, with steady lease-up velocity and investor competition.
• Fishers-Geist Corridor: Attracting new tech companies and young professionals, spurring multifamily and office complex investments.
• Broad Ripple Village: Known for high-density apartments and adaptive reuse of older retail to multifamily conversions.
• Fort Wayne’s Metro Quadrant: Rapid population inflows and new corporate anchors making multifamily a prime investment target.
• Carmel Arts & Design District: Upscale, walkable, and a magnet for luxury multifamily and mixed-use developers.
• Evansville Riverfront: Major redevelopment with new apartment complexes and urban revitalization.
• Bloomington Campus District: Student-focused multifamily with strong year-round occupancy.

Multifamily Financing: The 2025 Investor’s Choice in Indiana

Given high demand for rental housing, multifamily loan options remain top of mind. Here’s what sets multifamily financing apart in Indiana’s 2025 landscape:

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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Page 1 of 5

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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• Low Vacancy Rates: Statewide multifamily vacancy is holding below 5%, especially around universities and corporate hubs.
• Stable Rents: Annual rent growth of 4-5% is common in Indianapolis, Carmel, and Fishers.
• Value-Add Opportunities: Aging mixed-use stock in metro districts provides ripe conversion or renovation targets for investors using bridge-to-permanent or FHA multifamily loans.
• Favorable Lending Terms: Indiana’s regulatory environment supports longer amortization and competitive DSCRs (Debt Service Coverage Ratios).

Top Commercial Lenders in Indiana (2025)

Choosing the right lender is critical. In Indiana, these prominent financial institutions and specialty lenders are widely respected for competitive multifamily and CRE offerings:

1. Old National Bank: Indiana’s largest hometown lender, offering wide-ranging commercial and multifamily loans up to $10 million.
2. First Merchants Bank: Known for their local expertise and attractive rates on multifamily and mixed-use properties.
3. Huntington National Bank: Provides flexible bridge and permanent multifamily mortgages statewide.
4. BMO Harris: Focused on mid-to-large scale projects, including tax credit multifamily deals and construction/permanent financing.
5. Merchants Capital: A powerhouse for FHA, Fannie Mae, and Freddie Mac multifamily products across Indiana’s primary and secondary cities.

Types of Multifamily and Commercial Real Estate Loans in Indiana

Indiana investors have access to a robust suite of loan products tailored to multifamily acquisition, refinance, construction, and repositioning, including:

• Conventional Multifamily Mortgages: Fixed or adjustable rates, terms up to 30 years, minimum DSCR of 1.25.
• Agency Loans (Fannie Mae, Freddie Mac, FHA): Ideal for stabilized properties, offering maximum leverage and non-recourse features.
• Bridge Loans: Short-term financing for acquisition, rehabilitation, or lease-up prior to permanent take-out.
• Construction-to-Permanent Loans: Enables ground-up development or substantial renovation with single closing.
• Commercial Portfolio Loans: For investors scaling up with multiple properties across Indiana.

Step-by-Step Commercial Loan Application Process in Indiana

✅ 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%

Page 4 of 5

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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To secure a multifamily or other commercial real estate loan in Indiana, follow these vital steps:

1. Define Investment Criteria: Clarify asset type, submarket focus, and investment horizon.
2. Build Your Team: Engage an experienced Indiana commercial broker, local attorney, and property manager.
3. Pre-qualification: Contact 2-3 local lenders, share initial deal parameters, and get pre-qualified for target loan amounts.
4. Prepare Documentation:
   • Property financials (rent rolls, operating statements)
   • Sponsor resume/CV, track record, and credit score
   • Business plan and pro-forma analyses
   • Purchase contract or LOI
5. Submit Full Loan Application: Provide all requested documents and pay application/processing fees.
6. Property Appraisal & Third-Party Reports: Phase I environmental, appraisal, and depending on lender, property inspections.
7. Loan Committee Review: Final approval subject to satisfactory underwriting and due diligence.
8. Closing & Funding: Finalize loan documents, schedule closing, and receive funds to complete your investment.

Success Stories From Indiana’s Commercial Real Estate Scene (2025)

• Indianapolis Multifamily Repositioning: Jane D., an investor from Carmel, acquired a 52-unit apartment near Fountain Square for $2.8 million, securing a 10-year, 4.85% fixed multifamily loan from Old National Bank with 75% LTV. $250,000 in capital improvements lifted rents by 20% in under 18 months.
• Fort Wayne Student Housing Expansion: A group of Bloomington investors used a Fannie Mae Small Balance Loan for $1.63 million at 30-year amortization (5.10% fixed, non-recourse), enabling acquisition and minor renovations to a 36-unit property steps from campus. Occupancy remained above 98% throughout 2024-2025.
• Evansville Urban Revitalization: Local developer transformed a historic mixed-use building into 28 luxury apartments with a $3.9 million construction-to-permanent loan from Huntington National Bank. Favorable construction draws and a 7-year fixed takeout option enabled rapid lease-up and full refinance within eight months of stabilization.

2025 Market Trends for Indiana CRE Investors

• Interest Rate Environment: Stabilized rates (5-6% range for prime multifamily) with broad lender competition in urban markets.
• Green Financing: Lenders offering rate discounts for energy-efficient/LEED certified projects in downtown revitalization zones.
• Suburban Growth: Job relocations and demographic trends fueling multifamily development in Carmel, Westfield, and Fishers.
• Bridge-to-Perm Popularity: Investors capitalizing on conversion and value-add opportunities to reposition aging retail or office to multifamily.
• New Construction Demand: Zoning reforms and city incentives streamlining ground-up multifamily affordable housing deals.

Ready to Invest? Indiana CRE Multifamily Loans in 2025

✅ 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

Page 2 of 3

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

Page 3 of 3

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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If you’re seeking a reliable commercial real estate loan for multifamily investment in Indiana, now is a prime time to leverage the state’s market momentum and lender competition. With the right strategy and lender, you can unlock attractive cash flow, appreciation, and portfolio scalability. Start your journey today with a thorough pre-qualification and connect with trusted Indiana commercial lenders to make your next investment vision a reality.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

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