A pooling and servicing agreement (PSA), is a contract that is required when loans, including CMBS loans, are pooled together and packaged into mortgage backed securities. For CMBS loan borrowers, this means that they must abide by both the terms of the loan agreement, and by the terms of their loan’s pooling and servicing agreement.
CMBS loans, also referred to as conduit loans, are one of the most popular ways to finance commercial real estate in the United States. They are offered for almost all types of income-producing commercial properties, such as office buildings, shopping centers, apartment buildings, and hotels. When compared to other types of commercial property loans, CMBS loans have a variety of advantages and disadvantages. In this CMBS primer, we’ll discuss the differences between conduit loans and other types of commercial financing, and tell borrowers exactly what they need to know before deciding to take on CMBS debt.