How do banks price fixed-rate multifamily loans?

Many banks price fixed-rate multifamily loans at a spread over the matching US Treasury yield, set at closing. This Arlington closing priced at the 5-year Treasury plus 2.27%, which penciled to roughly 6.27% at the time, with a 5.75% floor. Treasury-plus pricing means the final rate moves with the market until the day documents are drawn.

Can I refinance a property that has mechanics liens or a lis pendens on title?

Yes, but the liens have to be resolved, bonded around, or paid at closing, and the litigation notice has to be released before a new lender will record in first position. On this deal, contractor liens and a lis pendens were identified early in title work and cleared through escrow so the refinance could fund.

What happens if my bridge loan matures before the refinance closes?

You negotiate an extension with the incumbent lender, usually for a fee, while the takeout closes. That is exactly what happened here: the national bridge lender granted an extension agreement that kept the loan in good standing while the bank refinance worked through appraisal, environmental, and committee approval.

What is a DSCR re-margin covenant with a payment reserve option?

If annual coverage falls below the covenant level, here 1.15x, the borrower can either pay the loan down or deposit a six-month payment reserve in a bank-controlled account until coverage is restored. The reserve option is meaningfully cheaper than a forced principal paydown and worth negotiating into the loan documents.

Should I take an agency loan or a bank loan on a small multifamily property?

Agency (Fannie Mae and Freddie Mac) small-balance loans offer non-recourse and longer fixed periods, but underwrite conservatively on in-place income and can move slowly. On this deal, agency quotes were obtained and run head to head against bank term sheets; the bank won on proceeds, speed, and an interest-only period the agency execution would not match.

Case Study: $3.08M Bank Refinance of a 42-Unit Arlington, TX Apartment Complex Through Mechanics Liens and a Lis Pendens

Deal at a Glance

Loan Amount	$3,077,000
Property	42-unit apartment complex
Location	Arlington, Texas (Dallas-Fort Worth metroplex)
Transaction	Refinance (takeout of a maturing national bridge lender)
Lender Type	Regional bank (California-headquartered, active in Texas)
Rate	Fixed at 5-year Treasury + 2.27% (~6.27% at signing), 5.75% floor
Term / Amortization	5 years / 30-year amortization, first 12 months interest only
Sizing	Max 70% of as-is appraised value, min 1.25x DCR
Prepayment	Declining (5-4-3-2-1), none in the final 90 days of the fixed term
Fee	0.5%
Recourse	Joint and several guaranties from the principals
Closed	Q4 2025

The Deal That Walked in the Door

We are Commercial Lending Solutions, a commercial mortgage brokerage based in Los Angeles, and this was the deal that started a three-property Texas (TX) multifamily run with a Utah-based investor syndicate. Before the 70-unit and the 158-unit closings that followed in 2026, there was this one: a 42-unit apartment complex in east Arlington, Texas, held across three investor LLCs, sitting on a maturing bridge loan from a large national non-bank lender. The eventual takeout came from a California-headquartered regional bank active in Texas.

Commercial Lending Solutions specializes in multifamily bank refinancing and bridge-loan takeouts for investors across Texas and nationwide, and this Arlington assignment was the first in a string of deals in that lane for this sponsor.

The bridge loan had financed the group's acquisition and renovation of the property. Now it was at the end of its rope, the lender had already papered one extension agreement, and the meter was running. The group needed permanent-style bank debt, and they needed a broker who could get a Texas workforce-housing deal in front of the right lenders fast.

What Made It Hard

A maturing bridge loan with an extension already burned. Every month of delay cost real money in extension fees and bridge-rate interest. The takeout had to move on a bank's timeline without dying in committee.
Title was not clean. Renovation work had left contractor mechanics liens on the property, including one for $179,011, and a lis pendens had been recorded. No bank records a first deed of trust behind any of that.
Multi-entity ownership. Three LLCs on title meant three sets of formation documents, beneficial ownership certifications, and coordinated guaranties.
Small-balance Texas multifamily is a crowded, uneven market. We pulled a CoStar screen of every lender active on $1M to $5M Texas multifamily in the prior 12 months and the list ran long, but quotes on paper and loans that actually close are different things.

How We Ran the Process

Trevor Damyan, a California-licensed real estate broker (DRE #02244836), ran this from Los Angeles and attacked it from two directions at once. We had agency small-balance quotes pulled through an intermediary so we could see exactly what the non-recourse execution offered, and we ran the deal directly to the relationship banks we knew would underwrite the story. The agency quotes came back conservative on proceeds and stingy on interest only. The winning bank, a California-headquartered regional with a serious commercial real estate desk, issued its letter of interest on July 11, 2025, and the borrower signed it within the week.

The winning structure:

$3,077,000 commitment, sized to a maximum 70% of as-is appraised value and a minimum 1.25x debt coverage ratio on a 30-year amortization
Fixed at the 5-year Treasury + 2.27%, roughly 6.27% at signing with a 5.75% floor, locked at closing
Twelve months of interest-only payments, then principal and interest on a 30-year schedule with a balloon at the 5-year maturity
0.5% loan fee and a declining prepayment schedule, with no penalty at all in the final 90 days of the fixed term, a small clause that makes the maturity refinance free to execute early
A borrower-friendly coverage cure: if annual DCR falls below 1.15x, the borrowers can post a 6-month payment reserve instead of being forced into a principal paydown

While the bank underwrote, we worked the title file. The mechanics liens were negotiated and cleared through escrow, the lis pendens was released, and the bridge lender's extension kept the existing loan in good standing until funding. The refinance closed in Q4 2025 and the national bridge lender was paid off in full.

"Mechanics liens and a lis pendens sound like deal killers, but they are process problems, not credit problems. We flagged every encumbrance in week one and gave the bank a title timeline it could believe, instead of letting them discover the mess on their own."
, Trevor Damyan, Commercial Lending Solutions

Why We Won This One

Two things closed this deal. The first was refusing to treat title problems as deal killers. Mechanics liens and a lis pendens scare borrowers because they scare lenders, but they are process problems, not credit problems. We flagged every encumbrance in week one, built the payoff and release plan into the closing checklist, and gave the bank a title timeline it could believe. A lender will work through a messy title if the broker shows them the path; they walk when they discover the mess themselves in week seven.

The second was running agency and bank executions head to head instead of guessing. The agency quotes were real, we had them in hand and refreshed them twice during the process, and they lost on the merits: lower proceeds, no meaningful interest-only, slower timeline. When the borrower picked the bank, they did it looking at both columns of a side-by-side we built, not on a hunch. That is what a broker is for.

The postscript says the most: this same syndicate came back to us twice within the year, and we closed their 70-unit Arlington deal and their 158-unit Fort Worth deal in 2026. Deal one done right is the cheapest marketing there is.

Is This Structure Right for Your Deal?

If you own small-balance Texas multifamily on a maturing bridge loan, or you have title issues that are making lenders nervous, this is a playbook we have run many times. We arrange permanent loans, bridge-to-perm takeouts, and agency loans from a network of more than 1,000 capital sources, and we run them against each other so you pick from real options.

Apply for refinancing or call us at 310.708.0690 to talk through your property.

Trevor Damyan

Commercial Mortgage Broker, Commercial Lending Solutions | CA DRE 02244836

Trevor Damyan is a commercial mortgage broker at Commercial Lending Solutions with a background in structured finance at CBRE and Marcus and Millichap Capital Corporation. He specializes in bridge loans, construction financing, SBA programs, DSCR loans, and complex capital structures for investors and developers across all 50 states.

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