Assuming a CMBS loan: who approves it, what it costs, what to send

A CMBS loan assumption lets a buyer take over the existing loan, at its rate and remaining term, with the servicer’s consent. Expect the loan agreement to require at least 60 days’ notice, an assumption fee, and a buyer the servicer approves; a recent agreement charges $25,000 to process plus 0.25% of the balance (1010 Pacific Street loan agreement, Section 6.4).

An assumption often beats paying off a loan in lockout or yield maintenance, and a below-market coupon can be worth real money to a buyer. Model that trade with the assumption calculator.

What the loan agreement requires

Section 6.4 of the October 1, 2025 agreement between 1010 Pacific Owner LLC and Citi Real Estate Funding and Morgan Stanley Bank sets out a typical “permitted transfer” of the whole property. The lender may not unreasonably withhold consent if:

1. No default is outstanding (other than one personal to the seller that the transfer cures).
2. Notice goes to the lender at least 60 days before the scheduled closing, with the buyer information the lender reasonably requires, and a $25,000 non-refundable processing fee.
3. The buyer passes the lender’s “then current underwriting and credit requirements for similar loans” sold into CMBS, judged on experience operating similar property, financial strength, business standing and relationships.
4. At closing the borrower pays an assumption fee of 0.25% of the balance for the first transfer and 0.5% for each later transfer, plus third-party and rating agency costs.
5. The buyer signs an assumption agreement, and an affiliate acceptable to the lender signs a replacement recourse guaranty and environmental indemnity meeting the original guaranty’s net worth and liquidity tests.
6. Title endorsements, new financing statements, insurance certificates and organizational documents for the buyer, which must meet the single-purpose entity covenants.
7. A new non-consolidation opinion, a REMIC opinion, and enforceability opinions.
8. The property manager continues or a qualified replacement signs on.
9. Rating agency confirmation, if the lender requires it.
10. The purchase contract is expressly subject to these conditions.

No transfer may close in the 60 days before or after a securitization of the loan. Other agreements set different fees, and the BANK5 2025-5YR14 prospectus notes that some loans allow “a limited number” of transfers with no assumption fee at all (prospectus, p. 226).

Transfers that need no assumption

Not every change of ownership is a sale of the property. The BANK5 prospectus (p. 225) says the loans generally permit, subject to limits, transfers among affiliates, for estate planning and on death, transfers of interests in a public company, and transfers of non-controlling or passive interests (limited partner and non-managing member stakes) as long as control does not change. The Pacific Street agreement allows some equity transfers without consent on 30 days’ notice (Section 6.3). If your deal can be structured as one of these, read the transfer definitions with counsel before you file an assumption.

Who approves it

The servicing agreement decides which servicer handles the request. Under the BANK5 2025-5YR14 PSA:

Situation	Decides	Consent or consultation
Transfer the documents allow with no lender discretion (conditions only)	Master servicer, as a Master Servicer Decision (3.18(m)(xiii))	None beyond checking the conditions (3.08(a))
Transfer needing lender consent, or releasing the borrower or guarantor	Special servicer: it is a Major Decision (6.08(a)(v), (viii))	Directing Certificateholder consent while no Control Termination Event exists; deemed given if no objection within 10 business days of a complete package (6.08(a); 3.08(a))
Loan is $20 million or more, 5% or more of the pool, or a top-ten loan (the last two only if at least $10 million)	Same	Rating agency confirmation as well (3.08(a))
Request arrives at the master servicer	Master servicer forwards it to the special servicer, which handles the borrower	Master servicer keeps supplying information (3.08(b))

If the master servicer and special servicer agree the master will process a Major Decision, the special servicer’s consent is deemed granted if it does not respond within 10 business days of the master’s recommendation, plus the Directing Certificateholder’s time (3.08(b)). Rating agencies that stay silent for 10 business days get a second request; 5 more business days of silence and the requirement is treated as not applying (3.25(a)). Roles explained: master vs special servicer, and the master servicer page.

The REMIC rules allow all of this. An assumption, and a waiver of a due-on-sale clause, are listed exceptions that are not significant modifications (26 CFR 1.860G-2(b)(3)(ii)-(iii)). The rule counts it as an assumption whether the buyer takes subject to the mortgage, both parties stay liable, or the seller is released (1.860G-2(b)(5)).

Who gets the fees

In BANK5 2025-5YR14, on a loan that is not in special servicing, assumption application fees go 100% to the servicer processing the request. Assumption, waiver and consent fees on a Master Servicer Decision go 100% to the master servicer; if the matter is a Major Decision, master and special servicer split them 50/50 (PSA 3.11(a), 3.11(c)). Where the loan documents allow a transfer without consent, the servicer may still charge an assumption fee unless the documents prohibit it, but a fee the documents do not provide for may not be a “significant” change in yield under the tax rules (3.08(h)).

The buyer’s file

Assumptions stall on missing paper. Have these ready when notice goes out:

• Buyer entity chart to the ultimate owners, formation documents and good standing.
• Guarantor financial statements, schedule of real estate owned, and evidence of net worth and liquidity against the original guaranty’s covenants.
• Résumé of experience with this property type in this market.
• Purchase contract with the assumption condition, and the buyer’s business plan and budget.
• Property manager and management agreement, or the replacement.
• Insurance certificates naming the lender, meeting the insurance requirements.
• Title commitment for the endorsements, and counsel lined up for the opinions.

Lenders re-underwrite the property, so recent operating statements, a rent roll and any open repair items matter too. If the loan carries reserves, settle with the buyer how balances are credited at closing: see CMBS reserves.

If the numbers do not work

If the buyer cannot or will not assume, compare a payoff through defeasance or yield maintenance, or see all the routes on selling a property with a CMBS loan. A buyer who needs more leverage than the existing loan gives may be able to add supplemental financing, but only if the documents allow it. Janover Capital LLC arranges new acquisition financing and is not a lender: get a CMBS quote.

This page describes loan and servicing documents. It is not legal advice; your documents and your counsel govern.

Sources: 1010 Pacific Street loan agreement, October 1, 2025, Sections 6.3-6.4; BANK5 2025-5YR14 PSA, 3.08, 3.11, 3.18(m), 3.25, 6.08(a); BANK5 2025-5YR14 prospectus, pp. 225-226; 26 CFR 1.860G-2(b).