Loan Size Example

$15 Million Multifamily Refinance in Chicago

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $15M multifamily refinance in Chicago represents a core institutional play in the Midwest's most mature multifamily market. These loans typically target stabilized Class B and Class C apartment buildings across established neighborhoods like Lincoln Square, Pilsen, or the South Loop, where debt service coverage ratios run 1.20x to 1.35x and loan-to-value hovers between 60 to 70 percent. At this size and leverage, the market has shifted decisively toward agency execution (Freddie Mac DUS or Fannie Mae DUS) as the primary path, though life company balance sheets remain viable for sponsors seeking longer interest-only periods or more flexible seasoning requirements. Current rate environment sits near 5.75 percent for 10-year fixed, anchored to 10-year Treasury plus 250 to 310 basis points depending on property profile and sponsor strength.

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Capital Stack

What a $15M Multifamily Refinance Capital Stack Looks Like

The $15M multifamily refinance in Chicago is almost exclusively a two-source stack: agency debt in the $10.5M to $12M range (70 percent LTV maximum), paired with sponsor equity or a mezz note to close the gap. Agency lenders dominate this tier because their pricing, execution speed, and long-term hold appeal to the regional and institutional sponsors active in Chicago's multifamily market. The lender selection decision turns on three factors: DSCR cushion, seasoning (occupancy and lease history), and sponsor experience; sponsors with strong track records in the Chicago submarket can access tighter terms and faster closings.

Capital Source	Rate / Cost	Size / LTV	Notes
Regional agency lender (Freddie Mac DUS or Fannie Mae DUS)	5.75 to 6.10 percent fixed, 10 years	$10.5M to $12M at 70 percent LTV	Full 10-year amortization or partial interest-only (12 to 24 months typical); recourse to sponsor or limited recourse on seasoned deals; 15 to 20 business day closing; strong preference for properties with 90-day+ lease and occupancy history
Sponsor equity or internal cash reserve	0 percent (opportunity cost)	$3M to $4.5M gap to $15M total	Closes the loan-to-value spread; no third-party cost; may include reserves held at lender (typically 6 to 12 months PITI)
Life company balance sheet (alternative path)	5.85 to 6.25 percent fixed, 10 to 15 years	$9M to $10.5M at 60 to 65 percent LTV	Preferred for sponsors seeking lower LTV, longer amortization, or flexible seasoning; slower closing (30 to 45 days); recourse on full balance sheet items; typically requires full reserve escrow and loan-to-cost on value-add scenarios
Mezzanine or preferred equity (rare for straight refi)	8 to 10 percent IRR or coupon	$1.5M to $2M subordinate to agency debt	Used only if sponsor capital is constrained or if bridge-to-perm structure is in play; adds complexity and reduces agency execution appeal; less common in stabilized Chicago market

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 Refinance Deal

The typical sponsor closing a $15M multifamily refinance in Chicago owns a stabilized, institutional-quality asset (80 plus unit property, established leasing, strong operational history) and carries a net worth of $25M to $75M, often with 10 to 20 years of multifamily or mixed-use development experience. These are often mid-market operators who have built local relationships and understand Chicago's neighborhood dynamics across the North Shore, West Loop, and downtown submarkets. The refinance is driven by one of three motivations: capturing rate dislocation (locking in lower rates from prior borrowing), pulling equity for capital recycling into new acquisitions or value-add projects, or extending maturity on an expiring loan without a sponsor change.

From the CLS CRE Pipeline

A Real $15M Example

In 2024, we structured a $14.8M permanent refinance on a 125-unit garden-style apartment community in a Chicago North Side neighborhood. The property was built in 1998, fully stabilized with 94 percent occupancy and average unit rents near market; the sponsor was a repeat Chicago operator with four similar assets in their portfolio. The deal executed through a regional agency lender at 5.78 percent fixed, 10 years, with a 30-year amortization and 12-month interest-only period at the borrower's election. The loan closed at 65 percent LTV with a 1.28x DSCR, and the sponsor retained $2.1M of equity to cover any capital expenditure needs over the 5-year hold. Closing timeline was 18 days from final application to funding.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$15M Multifamily Refinance Chicago FAQ

Agency programs (Freddie DUS and Fannie DUS) are built for exactly this loan size and property type, with streamlined underwriting, competitive pricing at 5.75 to 6.10 percent, and long-term portfolio retention that appeals to institutional sponsors. Life companies are price-competitive but slower and typically reserve their capital for larger loans ($25M plus) or lower-leverage scenarios (60 percent LTV or below). Regional and community bank balance sheets lack the funding bandwidth and standardized products to move efficiently at $15M.

Agency lenders typically require a minimum 1.20x underwriting DSCR for stabilized properties with 90-plus days of lease history; many sponsors hit 1.25x to 1.35x to create safety margin. DSCR covenant is usually set 5 to 15 basis points below the underwriting number, so a 1.25x underwritten deal might carry a 1.20x covenant floor, with financial statement delivery quarterly. Loans that slip below the covenant trigger additional reporting, workout discussions, or acceleration clauses if the breach persists beyond 90 days.

Agency execution typically closes in 15 to 25 business days from final application, assuming clean title, no special assessments, and sponsor cooperation on due diligence. Life company refinances run 30 to 45 days because of portfolio committee review and more detailed underwriting. Portfolio bank closings depend on internal capacity but usually land in the 20 to 35 day range. Seasoning requirements (minimum lease period and occupancy history) can extend timeline if the property is newer or recently leased up.

Both programs execute $15M loans with similar pricing (5.75 to 6.10 percent) and terms, but Freddie DUS typically has slightly faster processing (1 to 2 days quicker) and accepts slightly lower DSCR (down to 1.15x for strong sponsors), while Fannie DUS may offer longer interest-only periods (up to 36 months) and more flexible recourse structures. The choice between them is often driven by sponsor preference, market competition, and the delivering lender's relationship depth. Rate difference is usually 2 to 5 basis points at most.

Yes, but only up to the loan-to-value limit, which is capped at 70 to 75 percent for agency execution. If the property has appreciated significantly or rents have risen, the sponsor can refinance at the higher value and pocket the difference as a cash-out refi, subject to lender approval of the stabilization assumptions. This assumes strong underlying property performance and sponsor credit; if the property is distressed or the sponsor is overleveraged, lenders will restrict equity pull or require additional reserves. Most Chicago institutional sponsors doing equity pull-outs use the cash for acquisition or renovation capital on a separate project.

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$15 Million Multifamily Refinance in Chicago

What a $15M Multifamily Refinance Capital Stack Looks Like

Who Closes a $15M Multifamily Refinance Deal

A Real $15M Example

$15M Multifamily Refinance Chicago FAQ

Get a Quote on Your $15M Deal

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