Why Your Real Estate Deal Gets Approved… or Rejected

Why It Matters

Understanding these tightened credit criteria helps developers structure financing that meets lender expectations, reducing the risk of rejected loans and costly term adjustments in a volatile market.

Key Takeaways

• Lenders scrutinize borrower liquidity, not just project assets.
• Proven construction experience and money management are critical approval factors.
• Multiple concurrent projects raise lender risk and may reduce loan capacity.
• CMHC evaluates overall portfolio performance, including rent softness and debt service.
• Land-only net worth is weighted lower than cash‑flowing assets in credit decisions.

Summary

Finance Friday’s Josh and Aaron break down how internal credit teams evaluate commercial construction and multifamily loans in 2026, from the initial letter of intent to the final funding decision. They explain that today’s market is shaped by rising bond‑risk variables, expanding cap rates, and higher vacancy, prompting lenders to tighten credit standards and focus on granular borrower metrics. The video highlights that lenders now demand verified liquidity reserves, concrete proof of net worth, and a clean credit history. Experience on similar‑scale projects and disciplined cash‑flow management are weighted heavily, while reliance on home‑equity lines or land‑only net worth is viewed skeptically. Additionally, CMHC and other lenders are probing how many concurrent projects borrowers have, assessing overall portfolio debt service and rent‑growth assumptions. Key examples include the preference for cash‑on‑hand over borrowed equity, the practice of asking borrowers to disclose all active submissions, and the de‑valuation of land‑only assets to roughly 50 % of their book value. The hosts also note that mis‑managed construction budgets, not just lack of experience, are a leading cause of loan failures. For developers, the takeaway is clear: bolster liquid reserves, limit overlapping projects, and demonstrate a track record of successful, on‑budget builds. Lenders are tightening terms—potentially lowering loan‑to‑value ratios or raising rates—so financial discipline now directly impacts a deal’s approval odds.

Original Description

This is the part of the real estate financing process most investors never see...

In this episode of Finance Friday, Josh Findlay and Ehren Laycock from @bldfinancial break down how lenders and internal credit teams actually assess commercial real estate and multifamily financing deals in 2026.

If you’re submitting a deal for construction financing, CMHC financing, or multifamily lending, this is the part of the process that matters most. After your Letter of Intent, your deal enters credit review where lenders decide whether to approve, restructure, or reject your financing.

This video walks through exactly what happens during that stage and what lenders are really looking at when making funding decisions.

What you’ll learn:

✅ How the credit approval process works after your LOI

✅ Why “credit tightening” is happening and what it means for your deal

✅ How lenders assess your liquidity, net worth, and borrower strength

✅ Why managing cash flow during construction is critical

✅ How tranche financing creates cash gaps and out of pocket capital requirements

✅ Why your entire portfolio affects new deal approvals

✅ How financing type impacts loan size, leverage, and risk

✅ Why your projections must match real market conditions

✅ What reputational risk is and how lenders research borrowers

✅ How presenting your team, experience, and track record impacts funding decisions

In today’s market, lenders are not just looking at your deal. They are evaluating you as a borrower, your experience, your team, your portfolio performance, and your ability to manage risk across multiple projects.

Even strong deals can be declined if the borrower profile, liquidity, or overall portfolio does not meet credit expectations.

If you’re a real estate investor, developer, or operator in Canada, understanding how lenders assess risk, structure loans, and make approval decisions is critical to getting your deal funded.

This video is designed to help you submit stronger applications, avoid common mistakes, and better position yourself for financing in a tightening credit environment.

If you have a deal you want reviewed or want feedback on your submission, feel free to reach out to Josh and Ehren at BLD Financial.

More Finance Friday Videos with BLD Financial:

https://www.youtube.com/playlist?list=PLVKh4BMVJHMNo1Wrfpz4hF6D81qBJuBX5

Follow & Connect with BLD Financial on Social Media:

Josh - 519-729-9212

Ehren - 226-980-5048

Facebook - https://www.facebook.com/BLDfinancial

Instagram - https://instagram.com/bldfinancial

YouTube - https://www.youtube.com/channel/UCHyUMXqdg7zMJgjmFJpUfqg

Josh Findlay on Instagram - https://www.instagram.com/jfins/

Ehren Laycock on Instagram - https://www.instagram.com/laycock22/

Follow The Canadian Real Estate Channel on Social Media:

Instagram - https://www.instagram.com/canada_rei/

Facebook - https://www.facebook.com/canadianrealestatechannel

Topics covered include commercial real estate financing, multifamily lending, CMHC financing, construction loans, and underwriting in Canada.

Chapters:

0:00 - The Financing Approval Process

0:38 - Credit Is Tightening & LOI vs. Final Approval

2:09 - Biggest Misconception: Personal Application Doesn't Matter

2:40 - How Lenders Evaluate The Borrower

6:07 - Experience In The Project: How You Manage Your Money

8:01 - Exposure: How Many Other Projects Do You Have On The Go?

10:06 - How Lenders Assess Your Entire Portfolio

11:58 - Market Rents: Increased Lender Due Diligence in Location

12:56 - Type Of Financing Matters

14:35 - Reputational Risk

17:52 - Your Team Matters: How To Present Them

DLC National License: 12360

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