Loans in Indiana for Investors 2025 Now

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

Indiana’s commercial real estate market enters 2025 poised for growth, driven by robust industrial, office, retail, and multifamily activity in cities such as Indianapolis, Fort Wayne, Evansville, and Bloomington. As competition increases and cap rates tighten, securing the right commercial mortgage is essential for investors and business owners looking to thrive in this dynamic landscape. This comprehensive guide explores Indiana’s leading commercial real estate loan options, major lending players, key markets, and actionable steps to secure favorable financing.

2025 Indiana Commercial Real Estate Market Overview

Indiana’s central location, business-friendly tax climate, and ongoing infrastructure investment continue to fuel demand in various commercial sectors:

• Indianapolis Downtown & North Meridian: Office and mixed-use resurgence, with rising build-to-suit and value-add investments.
• Fort Wayne Innovation District: Technology parks, medical office facilities, and industrial space expansion.
• Evansville Riverfront: Hospitality redevelopment, logistics, and waterfront retail projects.
• Bloomington College Corridor: Student housing and multifamily growth, plus retail booms near the Indiana University campus.
• Carmel Arts & Design District: Premium retail, office, and boutique hotel financing opportunities.
• Fishers Nickel Plate District: Multifamily and mixed-use development zone with strong absorption.
• Lafayette Industrial Parks: Manufacturing and warehousing hotbeds attracting national CRE investors.

As a result, the need for creative and accessible commercial mortgages is at an all-time high 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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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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Types of Commercial Real Estate Loans in Indiana (2025)

Investors and owners can access several distinct commercial financing products. This guide highlights commercial mortgages in detail, but here’s a snapshot of key loan types available in the state:

• Commercial Mortgages: Long-term, fixed/variable rate loans for stabilized properties (retail, office, industrial, warehouse, multifamily).
• Bridge Loans: Short-term, interest-only loans for acquisitions or repositioning prior to obtaining permanent financing.
• Construction Loans: Finance ground-up development or major renovations; typically interest-only during build-out, converting post-completion.
• Multifamily Loans: Specialized lending for apartment buildings, ranging from 5-unit walkups to large complexes, supported by government and private programs.

This 2025 guide details Indiana commercial mortgages, including regional dynamics and lender insights.

Leading Commercial Real Estate Lenders in Indiana (2025)

✅ 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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Several prominent local, regional, and national lenders provide competitive commercial mortgage options to Indiana investors. Notable institutions operating in the state include:

1. Old National Bank (Evansville, statewide presence) – Known for relationship-based underwriting and local market expertise.
2. First Merchants Bank (Muncie HQ) – Aggressive in office, retail, and multifamily lending with flexible structures.
3. Horizon Bank (Michigan City HQ) – Robust loan programs for industrial, hospitality, and medical office properties.
4. KeyBank Real Estate Capital (Indianapolis office) – Strong multifamily, SBA 504, and CMBS platform in Indiana.
5. Centier Bank (Merrillville HQ) – Niche lender for small to mid-sized commercial properties across Northern Indiana.
6. Associated Bank (Indianapolis) – Focused on stabilized properties in Indianapolis, Carmel, and college towns.

✅ 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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These lenders offer a variety of fixed and adjustable-rate commercial mortgages, often with customized terms that reflect Indiana’s market fundamentals.

Commercial Mortgage Loan Features and Rates (Indiana 2025)

Commercial mortgages for stabilized Indiana properties generally feature:

• Loan Amounts: $500,000 to $5,000,000+ (portfolios and large assets may qualify for more)
• Terms: 5, 7, 10, or 15-year fixed and floating rates (25-30-year amortizations)
• Interest Rates (2025): 6.10% to 7.85% (dependent on property type, LTV, sponsor experience; spreads above 5Y U.S. Treasury)
• LTV (Loan-to-Value): Up to 75% (65% typical for office, 75% on multifamily/retail)
• DSCR (Debt Service Coverage Ratio): 1.25x – 1.50x standard
• Prepayment Penalties: Step-down, yield maintenance, or declining structures
• Non-Recourse & Recourse: Both available, depending on asset and lender

Note: Q1 2025 sees mild upward rate pressure but steady CRE origination volume, favoring well-underwritten assets in healthy submarkets.

Step-by-Step Indiana Commercial Mortgage Application Process

Follow these essential steps to secure a commercial mortgage for Indiana real estate in 2025:

1. Define Your Transaction: Property address, purchase price, down payment, intended use (investment vs. owner-occupant), and timeline.
2. Prepare Financials: Provide updated personal and business tax returns, property financial statements (rent roll, operating expenses), and a sources/uses budget.
3. Engage a Lender or Broker: Approach Indiana-based lenders (see above) or work with a respected commercial mortgage broker with regional experience.
4. Prequalification & Term Sheet: Share initial financials and property info for a conditional quote. Sign a term sheet outlining loan terms if satisfactory.
5. Due Diligence & Underwriting: Submit full documentation: property appraisal, rent roll, environmental reports, borrower entity docs, leases, etc. Lender conducts site inspection and risk assessment.
6. Commitment & Approval: On satisfactory review, receive a loan commitment letter with final terms and conditions.
7. Closing: Legal, title, and escrow work conclude. Sign final documents, fund, and close the transaction—typically 45-60 days for a traditional mortgage.

Indiana Commercial Financing: Success Stories (2025)

Success Story #1 — Office Acquisition, Carmel

John W., a physician, sought to purchase a 12,000-square-foot office condo near Carmel’s Arts & Design District. In Q2 2025, he secured a $1.9M commercial mortgage from Centier Bank at 6.45% fixed for 10 years, 25-year amortization, and a five-year declining prepayment penalty—enabling a swift closing and business expansion.

Success Story #2 — Industrial Property, Fort Wayne

Granite Holdings LLC acquired a 53,000-SF light industrial property in Fort Wayne’s Innovation District for $3.2M. Horizon Bank provided a $2.3M loan (72% LTV), 1.30x DSCR, 7.20% fixed rate, 7-year term. Quick underwriting turnaround and local insight enabled the buyer to beat competing offers.

Success Story #3 — Multifamily Financing, Bloomington

IU Rental Partners refinanced a 28-unit apartment building targeting student tenants in Bloomington. KeyBank’s multifamily program offered $2.6M non-recourse debt, 10-year fixed at 6.18%, with interest-only for three years, lowering payments and supporting future property upgrades.

Success Story #4 — Retail Redevelopment, Evansville

Evansville Main Street Group revitalized a riverfront retail property. Old National Bank delivered a $3.8M loan, 10-year term at 6.75%, supporting a phased renovation that brought new restaurants and local businesses to the area.

Commercial Mortgage Q&A: Indiana Investor FAQ (2025)

• Can I get a non-recourse commercial mortgage in Indiana?
  Yes, especially for stabilized multifamily projects and high-quality assets.
• Are rates expected to rise in late 2025?
  Market consensus in early 2025 is for stable-to-modestly higher rates, making it a good time to lock in fixed-term debt.
• Do Indiana lenders finance mixed-use properties?
  Most local and regional banks will underwrite retail/residential mixed-use, especially in downtown districts and university towns.
• Minimum loan size?
  Typical lender minimums are $500,000, but some community banks may go as low as $250,000 for owner-users.

Conclusion: Maximizing Opportunity with Indiana CRE Loans in 2025

Indiana’s commercial real estate momentum in 2025 requires informed financing choices. Whether you’re acquiring office space in Carmel, repositioning industrial assets in Fort Wayne, or expanding multifamily holdings near Indiana University, the right commercial mortgage strategy is essential. Investors who tap into local lender expertise, analyze submarket trends, and thoroughly prepare their loan applications position themselves for long-term success in the Hoosier State’s evolving commercial property landscape.

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