$20 Million Ground-Up Multifamily Construction in Dallas
By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions
A $20 million ground-up multifamily construction loan in Dallas represents a mid-market development play that attracts both traditional bank lenders and life company balance sheets. Dallas's sustained population growth, affordable labor, and competitive land costs make ground-up multifamily attractive for experienced sponsors, typically targeting 250 to 350 units across submarkets like Deep Ellum, Oak Lawn, or East Dallas. Construction loans at this size price between 7.75 to 8.50 percent depending on sponsor strength, market conditions, and the strength of the permanent takeout commitment. Lenders focus on sponsor experience, construction team quality, and pre-leasing performance to mitigate execution risk on what remains a capital-intensive and time-sensitive product.
Get a Quote on Your $20M Deal →What a $20M Ground-Up Multifamily Construction Capital Stack Looks Like
At $20 million, this deal size sits in the sweet spot for either an agency DUS execution or a life company balance sheet loan, with the final choice driven by sponsor profile, LTV appetite, and rate sensitivity. A regional bank may originate the construction piece with a planned permanent refinance to a life company or agency buyer, creating a two-step execution that improves long-term certainty. The choice often hinges on whether the sponsor prioritizes agency pricing and terms (which favor longer amortization and lower leverage) or life company flexibility (which allows higher LTC on construction and more favorable interest-only periods).
Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.
Who Closes a $20M Ground-Up Multifamily Construction Deal
The typical sponsor for a $20 million ground-up multifamily construction in Dallas has completed at least three to five development projects, maintains liquid reserves of $2 to $4 million, and demonstrates a clear understanding of Dallas market fundamentals and municipal approval timelines. Most sponsors own or control land outright or have secured a land purchase option, and they often bring in a general contractor with Dallas market experience and strong construction lender relationships. Motivations include portfolio diversification into Dallas's high-growth residential market, desire to capture value-add through pre-leasing and construction management, and intention to hold long-term or refinance into a permanent loan that offers attractive cash-on-cash returns.
A Real $20M Example
CLS CRE arranged a $18.5 million construction loan for a 285-unit ground-up garden apartment project in the East Dallas submarket, with a regional bank providing $12 million on a 24-month draw basis at 8.10 percent and the sponsor contributing $6.5 million in equity covering land, soft costs, and lease-up carry. The deal featured a forward commitment from a life company to provide a $13 million permanent loan at 8.35 percent fixed over 10 years once the property reached 88 percent occupancy and stabilized cash flow. The sponsor pre-leased 65 percent of units during the construction phase, which gave the lender comfort on execution and the permanent lender visibility to strong demand; the permanent refinance closed 14 months after initial construction funding and allowed the sponsor to lock in agency-equivalent economics with life company flexibility on terms.
Anonymized. All deal references protect borrower and lender identity.
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