This week the IRS announced some new rules that were put into place in an effort to make it easier to refinance commercial real estate loans! Under these stipulations, Real Estate Mortgage Investment Conduits (REMIC’s) will be allowed to refinance without tax penalties for the investors.

The original purpose for REMIC’s was to offer tax benefits to encourage mortgage backed securities, however these benefits could be lost if loans were rebuilt. With a new wave of commercial loan defaults expected in the near future, an institutional broker based out of New York known as Concept Capital states, “We have all heard stories about commercial real estate loans that are performing now but cannot be refinanced because of the tax rules, the IRS attempted to ease the tax code problem for these modifications.”