Series 1: Types of CRE Loans, Risk Areas and Performance Drivers
Course Number: ABA
Course Code: ABA
Notice: This curriculum is unavailable until further notice while Risk Management Association (RMA) implements content modifications. Please check back periodically for updates.
An overview of the different types of CRE loans and the importance of providing the right loan for both the borrower and the bank. The series will also help identify the risk areas in CRE lending and help analyze the drivers of CRE performance.
Produced by the Risk Management Association
*Only available as a series
- CRE-LDP 1.1 – Types of CRE Loans
- CRE-LDP 1.2 – Risk Areas and Drivers of CRE Performance
What You’ll Learn
After completing this series, students will be able to:
- Evaluate the differences between commercial and industrial (C&I) and CRE loan categories
- Identify how C&I, CRE, and owner-occupied loans fit into the credit decision framework
- Define and describe the characteristics and purposes of the four primary types of CRE loans
- Identify the loan’s purpose and related use of funds, type of property and collateral, and ultimate repayment source
- Explain repayment source co-dependence
- Identify the risk area of CRE lending
- Analyze the drivers of CRE performance
- Identify the drivers of CRE loan performance and apply the CRE Drivers of Loan Performance checklist to an actual loan
- Identify the three primary areas of loan performance risk (operational, market, and credit risk)
- Identify which of the three primary areas of risk the bank can influence and steps lenders can take to influence those risks
Audience: Commercial lenders and credit analysts who are not real estate specialists but who need to know more about assessing real estate risk.