Commercial Real Estate Loans in Indiana for Investors Now

Commercial Real Estate Loans in Indiana: Your Complete 2025 Guide

Indiana’s bustling commercial real estate (CRE) landscape offers abundant opportunities in sectors ranging from logistics and manufacturing to healthcare and multifamily. As the Hoosier State continues to attract investors in 2025, understanding the nuances of commercial real estate loans in Indiana is vital for success—whether you’re acquiring an office tower in Indianapolis, refurbishing a retail property in Carmel, or developing industrial space in Fort Wayne.

2025 Indiana CRE Market Overview

Indiana’s central geography and pro-business climate have fueled steady growth in its commercial districts. Notable markets include:

• Downtown Indianapolis: A major hub for office and mixed-use developments, with robust demand from tech, education, and healthcare sectors.
• Hamilton County (Carmel, Fishers): Known for affluent demographics, premium retail, and thriving multifamily development.
• Purdue Research Park (West Lafayette): Life sciences and tech-focused with attractive investment properties.
• South Bend-Elkhart Corridor: Strong industrial and logistics center fueled by automotive and distribution.
• Fort Wayne Downtown & Suburbs: A growing market for office, residential, and healthcare-related commercial spaces.
• Evansville Riverfront District: Transformation with hotels, entertainment, and medical property investments.
• Bloomington: Steady demand for student housing and hospitality-related assets adjacent to Indiana University.

Key Commercial Lenders in Indiana (2025)

• Old National Bank: Indiana’s largest homegrown commercial lender, strong in multifamily and retail financing.
• Lake City Bank: Leading mid-market and SBA commercial mortgages, with special programs for healthcare and manufacturing properties.
• First Internet Bank (Fishers HQ): National reach with deep experience in Indiana bridge and construction loans.
• STAR Financial Bank: Specializes in CRE loans for emerging suburban and tertiary markets across Indiana.
• Centier Bank: Focused on northwest Indiana, especially industrial and hospitality property loans.

Types of Commercial Real Estate Loans in Indiana

1. Commercial Mortgages

Traditional CRE loans used for purchasing stabilized office, industrial, retail, or mixed-use properties. These typically feature:

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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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• Loan amounts: $500,000 to $20 million+
• Terms: 5-25 years, with fixed or floating interest rates (rates vary 6.1%-8.9% in 2025)
• LTV ratios: Up to 75%, interest-only or amortizing structures

2. Bridge Loans

Short-term, flexible financing ideal for property repositioning, lease-up, or acquisition opportunities. In Indiana for 2025:

• Typical terms: 1-3 years, interest-only, rapid funding (as little as 15 days)
• Rates: 8.5%-12.5%, depending on sponsor strength and asset type
• LTV: Up to 75%, sometimes combined with mezzanine debt for higher leverage

3. Construction Loans

For ground-up development of multifamily, industrial, or mixed-use properties. Key features:

• Loan amounts: $1 million up to $50 million (for large developers)
• Interest rates: 7.2%-10.0% in 2025, generally interest-only during construction period
• Advances based on: Project milestones, requiring budget & contractor vetting

4. Multifamily Financing

✅ 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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Specialized for apartment buildings and large SFR portfolios. In Indiana, Fannie Mae, Freddie Mac, and select local banks provide:

• Loan terms: 5-30 years, with balloon structures common
• LTV: Up to 80% for stabilized assets
• Rates: 5.6%-7.5% for qualified sponsors, 2025 market
• Non-recourse options: Often available for stabilized assets and major metro areas

Indiana Commercial Loan Application Process (2025)

1. Prequalification: Contact an Indiana lender to discuss your project and get an initial quote.
2. Document Submission: Prepare a loan package including business entity docs, financial statements, rent roll, property appraisal, and project plan (for new development).
3. Underwriting: Bank reviews the property, borrower experience, cash flow, and market conditions.
4. Term Sheet & Approval: Receive a term sheet outlining loan amount, rate, term, and fees. Upon acceptance, formal credit approval follows.
5. Due Diligence & Appraisal: Lender orders appraisal, environmental report, and reviews title/deed history.
6. Closing: Final loan documents are signed, funds disbursed (or construction draws established for new builds).

✅ 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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Typical timeline: 30 to 60 days for mortgage or multifamily loans. Bridge loans can close in under 3 weeks for urgent projects.

Success Stories from Indiana Investors (2025)

• Downtown Indianapolis Office Repositioning: An investment group secured a $3.5 million bridge loan from First Internet Bank at 9.9% for a rapid value-add play—leasing up a previously vacant mid-rise and refinancing with a permanent loan after 18 months.
• Fort Wayne Multifamily Acquisition: A local sponsor financed a $2.7 million 52-unit multifamily property through Old National Bank with a 10-year, 6.75% fixed rate mortgage, 30-year amortization, and 77% LTV—enabling cash-out for renovations.
• Carmel Retail Strip Center Construction: Small developer received a $1.2 million construction loan from STAR Financial Bank at prime +1.25%, with interest-only payments during the 16-month build, then stabilized with long-term CRE financing.
• Logistics Warehouse in South Bend: Using Lake City Bank, an industrial sponsor closed a $4.1 million mortgage at 7.1%, 20-year term, financing the purchase and light improvements of a critical distribution center near the Indiana Toll Road.
• Bloomington Student Housing: A Purdue alum group closed a $5.2 million Fannie Mae multifamily loan (non-recourse, 12-year fixed at 6.15%, 81% LTV) for a purpose-built student housing asset adjacent to campus.

Indiana CRE Loan Tips for 2025 Investors

• Know your submarket: Lender appetite varies greatly between Indianapolis, suburban hubs like Carmel, and tertiary locations. Leverage local comps in your proposal.
• Highlight property cash flow: In 2025, lenders prioritize DSCR (debt service coverage ratio) minimums—typically 1.25x or higher for stability.
• Prepare for higher scrutiny: Banks scrutinize sponsorship experience and financial reserves more aggressively due to market shifting from 2022-2024 volatility.
• Interest rate environment: Maintain flexible exit strategies; consider shorter-term bridge financing if you expect further rate movement in late 2025.

Frequently Asked Questions

• What are typical commercial loan rates in Indiana (2025)?
  Most stabilized CRE loans: 6.2%-8.9%. Bridge/construction: 7.5%+
• How much do I need for a down payment?
  Expect to invest 20%-30% of project value for most properties. Some SBA/agency financing allows lower equity for select asset types.
• Which lenders are best for new investors?
  Look to local/regional banks (Lake City, STAR Financial) for flexible underwriting, or non-bank lenders for speed/creative structures on more complex deals.
• How fast can I access bridge loan capital?
  Bridge loans can close in 2-3 weeks in Indiana with complete documentation and appraisal coordination.

Start Your Indiana CRE Loan Journey in 2025

Success in Indiana’s dynamic commercial real estate market depends on partnering with the right lenders and leveraging strong market intelligence. Whether you’re buying, repositioning, or building, local expertise matters. Consult with bank officers at Old National, First Internet Bank, or Lake City to get tailored quotes, and ensure your lending partner is well-versed in your target Indiana submarket. With demand rising across office, multifamily, retail, and logistics, 2025 is poised to be another strong year for Indiana CRE investors who are well-prepared and well-financed.

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

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

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