Commercial Real Estate Loan Policy
This Commercial Real Estate Loan Policy addresses commercial real estate (CRE) loan products, underwriting, and related lending operations of a bank, credit union, fintech company, or other type of financial institution. In general, the primary purpose of an organization’s commercial real estate lending operations is to generate income while serving the credit needs of all creditworthy businesses within its geographic area by maintaining an effective loan policy and underwriting standards, in conjunction with sound loan administration by its officers and lending personnel, in order to achieve a healthy loan portfolio.
Table of Contents
- Purpose and Contents – Topic 1
- Policy Statement – Topic 2
- Definitions – Topic 3
- Risks Management – Topic 4
- Responsibility – Topic 5
- Loan Portfolio Management, Diversification and Concentrations – Topic 6
- Market Conditions and Analysis – Topic 7
- General Credit Underwriting Guidelines – Topic 8
- Acquisition, Development and Construction (ADC) Lending – Topic 9
- Income Producing Real Estate Lending – Topic 10
- Classification of CRE Loans – Topic 11
- Letters of Credit, Assurance or Cash in Lieu Bonds – Topic 12
- Title Insurance Procedures – Topic 13
- Commercial Real Estate Loan Workout Program – Topic 14
- Appraisal Policy Reference – Topic 15
- Environmental Risk Policy Reference – Topic 16
- Audit Policy – Topic 17
- Staff Training – Topic 18
- Retention of Documentation – Topic 19
Recent updates to this product:
10/15/24 Update
OCC Bulletin 2024-29 – Commercial Lending: Refinance Risk
03/18/24 Update
Eliminate and/or modify references to the term “Troubled Debt Restructuring” (TDR) with a “Borrower Experiencing Financial Difficulty.”
01/02/24 Update
FDIC FIL-64-2023 – Advisory: Managing Commercial Real Estate Loan Concentrations in a Challenging Economic Environment
07/17/23 Update
Joint Press Release – Agencies Finalize Policy Statement on Commercial Real Estate Loan Accommodations and Workouts
06/01/23 Update
Eliminate references to allowance for lease and loan losses (ALLL) which was replaced by current expected credit losses (CECL).
09/01/22 Update
OCC Bulletin 2022-20 – Accounting: Bank Advisory Series Updated – Accounting Standards Update (ASU) 2022-02 – “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures”
04/18/22 Update
OCC Bulletin 2022-7 – Commercial Real Estate Lending: Revised Comptroller’s Handbook Booklet and Rescissions
This Commercial Real Estate Loan Policy (approximately 130 pages) is available to purchase from BankPolicies.com in Microsoft® Word format.
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