Skip to main content

Lender Due Diligence Requirements Not Easing Yet

Lender policies were tightened in recent years amid a climate of intense regulatory scrutiny and risk aversion.

In the climate of intense regulatory scrutiny and risk aversion over the last few years, many of our lender clients have tightened, or adopted for the first time, their policies on managing environmental and physical risks of lending on commercial and multifamily properties.

As noted in a recent Economy Watch column, the Federal Reserve reported in an April “Senior Loan Officer Opinion Survey on Bank Lending Practices” that domestic banks are, on average, easing standards on commercial and industrial lending. Though this may be true for some aspects of lending, it does not seem to be the case for the physical due diligence standards for managing environmental and engineering risks in commercial real estate lending.  

Continue reading the Commercial Property Executive blog here.