$15M Multifamily Acquisition Houston | Commercial Lending Solutions 
Loan Size Example

$15 Million Multifamily Acquisition in Houston

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $15 million multifamily acquisition in Houston represents a core-plus opportunity in one of the nation's strongest rental markets, typically structured around a 65 to 75 percent LTV with agency debt at the core. Houston's multifamily fundamentals remain resilient due to in-migration, corporate relocation, and limited new supply in prime submarkets like Uptown, Midtown, and Energy Corridor. At current market conditions, borrowers are accessing permanent financing in the 5.75 to 6.25 percent range depending on asset quality, sponsor strength, and debt structure. This loan size sits squarely in the sweet spot for agency execution, where both Freddie Mac and Fannie Mae maintain robust appetite and competitive pricing.

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Capital Stack

What a $15M Multifamily Acquisition Capital Stack Looks Like

At $15 million, the capital stack is almost entirely agency-driven, with Freddie Mac DUS and Fannie Mae DUS as the dominant execution paths. Life companies remain viable for borrowers seeking longer terms or higher leverage (55 to 65 percent LTV), but agency execution typically wins on rate and certainty in Houston's competitive market.

Capital Source Rate / Cost Size / LTV Notes
Agency (Freddie Mac DUS or Fannie Mae DUS) 5.75 to 6.25 percent fixed, 10-year to 12-year amortization $10M to $15M, 70 to 75 percent LTV typical Primary execution in Houston; strong appetite for stabilized and value-add assets; 1.20x to 1.35x DSCR requirement; 30 to 60 day closing; full recourse or partial recourse structure negotiable
Sponsor equity Required return 8 to 12 percent IRR $3.75M to $5M equity (25 to 30 percent of purchase price) Equity raise dependent on asset class and value-add story; Houston market strength supports lower equity percentages for core assets; common sources include family office, institutional investor, or seasoned local operator reinvestment
Life company (alternative execution) 6.00 to 6.50 percent fixed, 10-year to 15-year amortization $9M to $10.5M, 60 to 65 percent LTV Used when borrower seeks extended leverage or longer non-amortizing period; 1.25x to 1.40x DSCR requirement; 60 to 90 day closing; typically non-recourse; attracts sponsors with strong liquidity and track record
Bridge or interim (if value-add or lease-up) 7.50 to 9.00 percent interest-only, floating or fixed $8M to $12M for bridge; 75 to 85 percent LTC on as-is basis Used only for active value-add repositioning; 12 to 24 month term typical; convert to agency or life company permanent upon stabilization; common for rent roll or operational improvement plays in Houston

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 $15M Multifamily Acquisition Deal

The typical $15 million multifamily buyer in Houston is an experienced operator with $50 million to $250 million in AUM, a portfolio of 3 to 8 assets, and demonstrated ability to source, stabilize, and exit value-add multifamily. Sponsors are often locally embedded or have significant Southwest region presence, with access to $3.75 million to $5 million in equity capital and relationships with local property management and leasing teams. Common motivations include acquisition of off-market or slightly distressed assets, opportunistic buys in supply-constrained submarkets, and refinancing of existing stabilized buildings to capture equity or recycle capital into newer investments.

From the CLS CRE Pipeline

A Real $15M Example

A CLS CRE client closed a $14.2 million acquisition loan on a 186-unit garden-style multifamily asset in the greater Midtown submarket in September 2024. The sponsor, a regional operator with 5 prior acquisitions, identified an off-market opportunity with 87 percent occupancy and $1.4 million in annual NOI, seeking to execute a light capital improvement program and lease-up strategy. The agency lender provided a 10-year fixed-rate loan at 6.10 percent on a 72 percent LTV (1.28x initial DSCR), with 5 years of full amortization and a 30-day funding timeline. The sponsor contributed $3.8 million equity, and within 18 months achieved 96 percent occupancy and $1.65 million NOI, enabling a profitable refinance.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$15M Multifamily Acquisition Houston FAQ

Agency lenders (Freddie Mac and Fannie Mae) typically require a 1.20x to 1.35x DSCR, with most executions landing at 1.25x to 1.30x. Houston's strong rental market allows slightly lower DSCR on stabilized assets with in-place rent roll. Value-add or lease-up deals may require higher DSCR (1.30x to 1.40x) depending on property and sponsor profile.
Most agency lenders offer 0 to 3 years of interest-only, with the most common structure being 2 years IO followed by 8 years of amortization on a 10-year term. IO periods are more readily available for value-add or new-acquisition scenarios where NOI ramp is expected. Borrower must demonstrate clear path to DSCR covenant by end of IO period.
Agency lenders in the $10 million to $25 million range typically close in 30 to 45 days from clear underwriting submission and appraisal completion. Houston has strong local appraiser and title infrastructure, so timeline is rarely constrained by third-party reports. Longer timelines (60+ days) occur when sponsor is still in due diligence or property has operational red flags requiring underwriting conditions.
Agency execution typically includes full or partial recourse guarantees, depending on the lender, borrower strength, and LTV. Freddie Mac and Fannie Mae DUS products often allow non-recourse structures for experienced sponsors with strong liquidity, particularly below 75 percent LTV. Recourse terms are a key negotiation point and should be evaluated early in underwriting.
Houston's multifamily market has strong fundamentals including net in-migration, low unemployment, and limited new supply in prime submarkets, which supports stable or growing rents and occupancy. These metrics, combined with competitive agency lending, support 5.75 to 6.25 percent rates on core and core-plus acquisitions. Properties in lesser-supplied areas (Uptown, Midtown, Bellaire area) command tighter pricing than Class B suburban assets, reflecting demand and cap rate compression.


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