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

2025 brings fresh opportunities—and fierce competition—to the Ohio commercial real estate (CRE) market. Whether investing in Columbus’s Short North district, expanding in Cincinnati’s Over-the-Rhine, or developing assets in Cleveland’s Flats, understanding Ohio’s loan landscape is vital for successful deals. This comprehensive guide will walk you through commercial multifamily financing in Ohio for 2025, local market insights, top lenders, application steps, and success stories.

2025 Ohio CRE Market Overview

Ohio’s commercial property scene continues to flourish, driven by economic revitalization and strong population growth in its metros. High demand for urban living and business expansion is fueling multifamily investments, retail, industrial, and mixed-use assets. With average cap rates between 6.0% and 7.1% statewide and robust local economies, Ohio remains highly attractive for seasoned investors and new entrants alike.

• Rising Rents: Multifamily and mixed-use assets lead the appreciation, especially in Columbus and Cincinnati.
• Major Employers Expanding: Google’s New Albany data center and Amazon’s fulfillment centers boost CRE demand.
• Downtown Revivals: Cleveland and Dayton districts offer new opportunities for adaptive reuse and ground-up construction.

Ohio’s Key Commercial Districts (2025)

Each Ohio region offers diverse opportunities and financing needs. Top districts for multifamily and commercial investment 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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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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1. Short North (Columbus): Trendy, arts-focused, and dense, popular for Class A multifamily developments.
2. Over-the-Rhine (Cincinnati): Historic revitalization area attracting boutique apartments and mixed-use retail.
3. The Flats (Cleveland): Riverfront development zone known for new apartments, offices, and entertainment venues.
4. Downtown Dayton: Increasing demand for workforce housing and Class B/C multifamily conversions.
5. Easton (Columbus): Commercial and mixed-use hub poised for large-scale multifamily projects.
6. Warehouse District (Toledo): Adaptive reuse of lofts driving multifamily demand.
7. Polaris (Columbus): Booming suburb with ongoing office, retail, and multifamily growth.
8. University Circle (Cleveland): Proximity to hospitals and universities supports strong multifamily occupancy.

Ohio Multifamily Financing in 2025

With multifamily properties in the spotlight for 2025, Ohio investors will encounter a competitive but rewarding finance environment. Rates, terms, and requirements have evolved, but debt capital remains broadly available for solid deals.

Typical Loan Products for Ohio Multifamily Properties

• Conventional Bank Loans: Best for stabilized apartment assets (rates from 6.0-7.3%, amortized up to 30 years).
• Agency Loans (Fannie Mae, Freddie Mac): Ideal for properties ≥5 units. Competitive rates (5.65%-6.2%), up to 80% LTV, up to 30-year amortization, non-recourse.
• Federal Home Loan Bank (FHLB) Programs: Often used for affordable or workforce housing, especially in secondary and tertiary markets.
• CMBS Loans: For large balance multifamily portfolios in major metros—fixed rates, 10-year terms, 30-year amortization, non-recourse.
• Regional/Community Bank Loans: Good for value-add, mixed-use, and mid-size multifamily deals. Typically require recourse.
• Bridge Loans: Useful for repositioning, lease-ups, or renovations.

Current Multifamily Loan Terms in Ohio (2025)

Top Multifamily Commercial Lenders in Ohio (2025)

• Huntington National Bank: Headquartered in Columbus, among Ohio’s largest CRE lenders for apartments and mixed-use.
• Fifth Third Bank: Stimulating development, especially in Cincinnati, Dayton, and surrounding suburbs.
• KeyBank Real Estate Capital: Active in large agency and portfolio loans, covering Ohio’s major metros and secondary cities.
• Red Capital Group: Major multifamily and healthcare lender (Fannie/Freddie specialist), based in Columbus.
• PNC Real Estate: Extensive Ohio footprint for construction, permanent, and bridge debt.
• Walker & Dunlop: Leading Fannie Mae DUS lender serving Cleveland, Columbus, and Cincinnati multifamily markets.

How to Apply: Step-by-Step Ohio Multifamily Loan Process (2025)

1. Initial Assessment:
   • Gather property info (rent roll, T-12, rent comparables, property condition).
   • Prepare borrower financials and business plan.
2. Engage Financing Advisors/Lenders:
   • Solicit term sheets from Ohio banks, agency lenders, and/or mortgage brokers with regional expertise.
   • Compare terms, recourse, and rate locks.
3. Letter of Interest (LOI)/Term Sheet:
   • Lender issues detailed term sheet (rate, loan amount, amortization, prepayment, fees).
   • Negotiate terms, sign LOI, and submit deposit for due diligence.
4. Due Diligence:
   • Lender orders third-party reports: appraisal, property condition report, Phase I Environmental.
   • Borrower submits updated property/financial info.
5. Underwriting and Approval:
   • Loan is underwritten and submitted to an internal loan committee.
   • Exception items or clarifications addressed (if any).
6. Loan Closing:
   • Legal docs drafted by lender’s counsel; closing scheduled (typically 45–70 days from signed LOI for permanent loans, as fast as 3 weeks for bridge).
   • Funds disbursed at closing—congratulations, you own (or have refinanced) Ohio multifamily!

2025 Success Stories: Ohio Multifamily Loans

Success Story 1: Over-the-Rhine, Cincinnati

• Loan Amount: $3.1 million Fannie Mae DUS loan (non-recourse)
• Property: 42-unit historic rehab multifamily near Findlay Market
• Terms: 6.12% rate, 30-year amortization, 10-year fixed, 80% LTV
• Result: Sponsor secured favorable debt with interest-only payments first 2 years; rapid stabilization and occupancy north of 95% within 14 months.

✅ 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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Success Story 2: Short North, Columbus

• Loan Amount: $4.6 million bridge-to-agency refinance
• Property: Lease-up of new 60-unit luxury multifamily, Class A
• Terms: Bridge loan at 8.2%, 18 months; converted to Fannie Mae takeout at 5.89%, 10-year term
• Result: Borrower used bridge to finish lease-up, increase NOI, then secured permanent agency loan at lower rate with cash-out for additional acquisitions.

✅ 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

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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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Success Story 3: Flats, Cleveland

• Loan Amount: $950,000 bank portfolio loan
• Property: 18-unit adaptive reuse, mixed multifamily and office
• Terms: 7.1%, 7 years fixed, 25-year amortization, 75% LTV; recourse
• Result: Partnership secured fast approval for time-sensitive closing; property hit 100% occupancy in 8 months amid revitalized riverfront activity.

Why Choose Ohio for Multifamily Investing?

• Consistently strong rent growth and occupancy rates, even amid national economic shifts
• Affordability compared to larger coastal markets, but with robust demand
• Friendly state incentives for workforce and affordable housing development
• Well-capitalized local and national lenders provide ample debt for qualified sponsors
• Diversified growth across multiple metros: not reliant on a single city or industry

Expert Tips for Multifamily Loan Success in Ohio (2025)

• Prepare current P&Ls, rent rolls, and market studies to justify pro-forma rents and stability
• Leverage financing advisors familiar with Fannie Mae, Freddie Mac, and local portfolio lenders
• Consider bridge loans for value-add deals or assets needing renovations prior to agency takeout
• Lock rates early—expect moderate rate volatility through Q1/Q2 2025
• Prioritize strong submarkets (Short North, Over-the-Rhine, University Circle, Easton)
• Stay ahead of state compliance, zoning, and incentive programs

Conclusion: Secure Your Ohio CRE Loan in 2025

With the right approach—targeting robust Ohio submarkets and aligning with top local lenders—the coming year offers immense opportunity in the multifamily space. Assemble your team, prepare your underwriting, and seize your next Ohio CRE loan with confidence.

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