Reviewed by Craig Hoebing, Capital Market Funds, LLC - CBK-2007014 - Commercial Mortgage Banker · Updated October 2026
A refinance that worked five years ago can fail today's tests even when the tenant is still there. If the property's value is lower, the new lender's loan-to-value cap produces a smaller loan. If the rate used to size the payment is higher than the old coupon, debt service coverage produces a smaller loan too. Either way the new proceeds may not cover the old balance. The check the borrower brings is the cash-in. It is the opposite of cash-out. The Federal Reserve's SR 15-5 letter and the OCC's Commercial Real Estate Lending handbook are why banks care about those tests. They do not calculate your gap.
The Mortgage Bankers Association's research section is the national picture of originations and maturities. A wave of maturities is not your payoff letter. The June 29, 2023 interagency statement on commercial real estate accommodations tells supervised institutions they may work with creditworthy borrowers, including short-term relief. It does not require your lender to accept a cash-in plan, and it does not require an extension. Read it as permission for banks to be constructive, not as a right.
Size the gap, then look at debt alternatives
Put the income you can document into the DSCR calculator with a payment you are willing to test. Put the balance, the rate you type, and the amortization into the amortization calculator. The calculators do arithmetic. They do not know the lender's cap. If the new loan that passes the tests is smaller than the payoff, the difference is the cash you need, before reserves and costs. Label any future rent as future rent.
Alternatives that are still debt include asking the current lender for an extension, adding a junior or mezzanine loan behind a smaller senior loan, or using a bridge loan until the income or the value supports a refinance. Mezzanine debt and preferred equity are compared, as capital behind the senior loan, on mezzanine versus preferred equity. A bridge is Arizona bridge, arranged with private lenders. A full refinance, when the numbers work, is Arizona refinance. Maturity context is 2026 maturities. Preferred equity is mentioned on that comparison page as a different layer. This note does not offer to raise equity, syndicate a deal, or sell a security. Capital Market Funds arranges debt.
What cash-in is not
It is not a tax strategy. Whether a paydown or a new loan changes your taxes is a question for your tax advisor. It is not a moral failing. It is a proceeds gap. It is also not something we will fill with a promise of leverage. If the gap is larger than the cash you have, say so at the start. Hiding it wastes the refinance clock.
Capital Market Funds is not a Fannie Mae DUS lender. The office is 7373 E Doubletree Ranch Rd #255, Scottsdale, AZ 85258. The phone is (480) 495-8072. Capital Market Funds, LLC - CBK-2007014 - Commercial Mortgage Banker and NMLS 1445066. Bringing a sources-and-uses draft does not commit a lender to take the paydown.
Sources
Questions
- What does cash-in mean on a commercial refinance?
- The new loan is smaller than what it costs to pay off the old one. You bring the difference, plus costs and any reserves the new lender holds back.
- Why would a lower value or a higher payment force cash in?
- A lower value tightens a leverage cap. A higher payment tightens coverage. Either test can cut proceeds below the payoff. The lender chooses the test. We do not publish one.
- Is an extension a substitute for bringing cash?
- Only if the current lender agrees. The 2023 accommodations statement does not require that yes. A bridge or a junior loan is different debt, not a promise either.
- Will you raise equity to fill a cash-in gap?
- No. This firm arranges debt. This note is not a securities offering and not an equity raise.