Outsourcing Commercial Real Estate Underwriting

Benefits of Outsourcing Your Commercial Real Estate Underwriting

Navigating the Complexities of Multifamily Underwriting Transactions

Outsourcing your underwriting helps lenders save on overhead expenses, while also providing a responsiveness that current capacity does not always allow.

That is, lenders in commercial real estate outsource their underwriting because they want to reduce turnaround times and reduce expenses. Underwriting a commercial property regularly takes a month or more because of all the red tape and complexities that lenders need to navigate.

Although outsourcing typically has a negative connotation, the most efficient companies are able to better leverage their staff and knowledge by utilizing outsourcing as a tool.

Armada Analytics reduces the time it takes to perform due diligence in underwriting multifamily properties, thus freeing up your resources to be better and more productively employed.

To understand why outsourcing your underwriting and due diligence might be a good idea, let’s examine the benefits in greater detail.

1. Speeding Up Your Turnaround Times

When we introduced VendorFlow earlier this year, we looked at the pain points our clients experience in coordinating with all the vendors that had to visit a property before due diligence was completed, and you could approve a loan.

Getting all the site inspections done in a timely manner, minimizing the disruption to existing tenants at a multifamily property, accounting for all the points on a property report that don’t agree, is a time-consuming and potentially aggravating process for most lenders.

Turning to an expert underwriting agency for a faster and more streamlined approach to the underwriting process for multifamily loans saves lenders time. It allows them to approve a higher volume of loans and realize a greater ROI.

2. Relying on the Experts

Savvy lenders understand that keeping current on underwriting standards and compliance is a full-time job for a staff of experts. For instance, many lenders today outsource their commercial asset management services.


Commercial asset managers stay up-to-date on reporting requirements for all loans postclose. A quick glance at the reporting requirements for Agency loans over the past decade gives a clear picture of how difficult it has become for lenders to ensure that the reports they receive from borrowers are accurate and complete.

Are your Borrowers fulfilling the Covid Debt Service Requirement? Are they bonded for termite inspections?

Outsourcing your commercial loan services to industry experts ensures that the loans on your books remain in compliance and minimizes the risk of default.

3. Retaining Customers

The last thing you want as a lender is for your high-volume customers to take their business elsewhere because your bank or lending institution is taking too long to process their loans. 

Customers who have to check the progress of their loans on a weekly basis are dissatisfied customers. When you partner with Armada Analytics as your commercial real estate underwriting vendor, loan closing times are greatly accelerated, leading to less hassle and more mortgages handled in a fraction of the time.

Reducing client dissatisfaction in the time it takes to process and close on a loan is a great way to keep your customers happy.

4. Underwriting More Mortgages

Commercial real estate in general, and multifamily commercial real estate in particular, is booming.

According to a recent report from the Mortgage Bankers Association (MBA), total commercial and multifamily mortgage borrowing is expected to break 1 trillion dollars for the first time in 2022. 

Despite the Federal Reserve raising interest rates—and the indication that they will continue with rate hikes for the foreseeable future—increases in property incomes, and the stability of investors in commercial real estate will keep the CRE market strong.

Yet many lenders will not benefit from this increase in commercial real-estate transactions because they don’t have the in-house team to underwrite more mortgages.

By outsourcing your underwriting to a third-party vendor such as Armada, you can take advantage of this anticipated increase in Borrowers looking to increase their investments in commercial real estate.

5. Improving Accuracy

Many lenders find that their internal underwriting team is stretched to full capacity.

If this is the case, seeking expert guidance in your underwriting and due diligence processes makes good financial sense.

Outsourcing your underwriting to a third-party vendor ensures that all underwriting standards and due diligence requirements are met with timeliness and accuracy.

Lenders who partner with third parties can expect greater accuracy in underwriting and precision on key documents such as property zoning reports.

6. Saving Money

The cost of setting up a commercial loan can be quite high. Lenders must keep track of all the documents from origination to closing to postclose.

The price of conducting regular follow-ups with inspectors and other necessary parties, performing due diligence, and making sure that everything is in order, can add up quickly for lenders in commercial real estate.

With outsourced underwriting, lenders enjoy greater cost savings as those with greater knowledge and experience offer supplementary assistance to your in-house team to tackle some of the thornier issues that arise in underwriting commercial properties. 

7. Eliminating the Backlog

As we mentioned earlier, 2022 will be a banner year in terms of the money that lenders can make originating new loans for commercial properties. 

As the volume of loans coming your way grows, you want to make sure that your underwriters can keep up with demand. The last thing you want is a huge backlog of loans “in process.”

Many lenders come to Armada Analytics when they find that they simply can’t keep up with the number of loans pending approval. By outsourcing even a portion of your loans to a third-party vendor, you can prevent (or eliminate) your backlog of loans and get back to business.


Instead of treating outsourcing like a bad word, we need to acknowledge that every successful business enterprise uses outside vendors to further their goals.

The benefits listed above demonstrate the wisdom of going with a seasoned and knowledgeable company to handle the underwriting, due diligence, and commercial asset management of your loans.
At Armada, we want to support your in-house underwriting team to take full advantage of the influx of CRE loans coming in the second half of 2022.

Let’s Talk About How We Can Help You and Your Underwriting Team

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