$10M Bridge Loan Houston Multifamily | Commercial Lending Solutions 
Loan Size Example

$10 Million Bridge Loan for Houston Multifamily

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $10 million multifamily bridge loan in Houston targets value-add or repositioning plays in a market where cap rates remain attractive and demographic tailwinds support rent growth. Specialty bridge debt funds and regional bank balance sheets compete aggressively for this ticket size, with most lenders underwriting to 70 to 75 percent LTC for non-recourse structures or 60 to 65 percent LTC for recourse bank products. Rates float on SOFR plus 250 to 350 basis points depending on leverage, exit strategy clarity, and sponsor track record. Houston's large multifamily inventory and resilient job growth create predictable refinance paths once value-add work is stabilized.

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Capital Stack

What a $10M Multifamily Bridge Capital Stack Looks Like

At $10 million, specialty bridge debt funds dominate this segment because they accept higher leverage and faster underwriting timelines than traditional banks, making them the natural first choice for sponsors with clear 24 to 36 month exit strategies. Regional banks still compete on recourse deals where sponsors offer balance sheet strength or co-tenancy relationships, but non-recourse debt fund money typically wins on speed and terms.

Capital Source Rate / Cost Size / LTV Notes
Specialty bridge debt fund (non-recourse) SOFR + 275 to 325 bps, 9.25 to 9.75 percent all-in $7.0M to $7.5M at 70 to 75 percent LTC Primary source for this deal size; 36-month term with two 12-month extension options; floating-rate with rate cap opportunity; emphasis on exit cap at stabilization, typically 5.5 to 6.25 percent
Regional bank balance sheet (recourse) SOFR + 300 to 375 bps, 9.5 to 10.0 percent all-in $6.0M to $6.5M at 60 to 65 percent LTC Secondary option; recourse to sponsor; 24-month initial term; faster decision timeline; underwriting emphasizes in-place NOI and CapEx line-item verification
Mezz lender or second trust deed 11.0 to 12.5 percent fixed $1.5M to $2.0M at 10 to 15 percent junior position Equity gap financing; used only when bridge debt cap is insufficient or sponsor wants to preserve equity; subordinate to first lien; full recourse
Sponsor equity (cash or line of credit) N/A (sponsor capital) $2.0M to $3.0M at 20 to 25 percent project equity Covers CapEx budget, carrying costs, and placement fees; lenders require minimum 20 percent equity for value-add deals; Houston market supports 8 to 12 percent annual yields on stabilized multifamily

Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.

Sponsor Profile

Who Closes a $10M Multifamily Bridge Deal

The typical sponsor closing a $10 million bridge in Houston has $15 million to $35 million in net worth, five to ten years of multifamily value-add experience, and a documented portfolio of 200 to 600 units previously stabilized and refinanced. Motivations include acquiring an off-market or distressed property in tight submarkets like Midtown, Uptown, or the Energy Corridor, or refinancing an existing hold with short-term debt to unlock value through rent growth and operational improvements. Many sponsors are regional operators based in Texas or the Southwest with local property management infrastructure and lender relationships.

From the CLS CRE Pipeline

A Real $10M Example

CLS CRE closed a $10.2 million bridge loan for a 178-unit garden-style community in the Southwest Houston submarket, structured at 72 percent LTC with a specialty debt fund. The property was acquired at a 5.9 percent stabilized cap rate and carried $650,000 in annual in-place NOI; the sponsor planned 18 months of unit renovations, amenity upgrades, and leasing optimization to reach $1.05 million stabilized NOI. The loan carried a floating rate of SOFR plus 300 basis points with a 6.0 percent exit cap, a 36-month term, and two extension options. The sponsor successfully refinanced into an agency fixed-rate product at month 22 after achieving 94 percent occupancy and $1.08 million NOI, exiting the bridge ahead of schedule.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$10M Bridge Loan Houston Multifamily FAQ

Specialty debt funds typically close in 21 to 30 days from application to funding, provided CapEx budgets, proformas, and sponsor background checks are clean. Regional bank bridge products take 35 to 50 days due to committee review and tighter underwriting. Hard costs and appraisal turnaround can add 7 to 10 days to the critical path.
Houston remains a strong market for bridge exits because agency lenders and life companies actively compete for stabilized multifamily assets at reasonable cap rates. The region's population growth, corporate relocations, and employment diversity support consistent rent growth, making refinance projections conservative and achievable.
Most lenders assume $4,000 to $6,500 per unit for cosmetic and mechanical upgrades, depending on property age and initial condition. Lenders stress-test the budget and often require contingency reserves of 10 to 15 percent plus holdback provisions tied to completion milestones.
Yes, but it is uncommon. A typical structure stacks a $7 million non-recourse senior note from a debt fund with a $2 to $3 million recourse mezz note or second trust deed. This appeals to sponsors seeking full agency refinance eligibility while using cheaper non-recourse leverage for the majority of the structure.
If the stabilized property fails to refinance at or below the exit cap rate (commonly 5.5 to 6.25 percent in this scenario), the sponsor must extend the bridge loan, negotiate a rate reduction with the bridge lender, or inject additional equity. Extension terms typically cost an additional 25 to 50 basis points and are limited to two 12-month periods.


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