$25M Bridge Loan Houston Multifamily | Commercial Lending Solutions 
Loan Size Example

$25 Million Bridge Loan for Houston Multifamily

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $25 million bridge loan for multifamily in Houston targets value-add repositioning plays across core submarkets like Uptown, Midtown, and the Greater Heights corridor. At this ticket size, borrowers typically work with specialty bridge debt funds offering non-recourse leverage at 70 to 75 percent LTC, or bank balance sheet programs with recourse at 60 to 65 percent LTC. Rates float SOFR-plus in the 8.50 to 9.25 percent range depending on lender type, deal quality, and sponsor track record. The 24 to 36 month term structure aligns with Houston's stabilization cycle, with exit positioned through agency refinance once in-place NOI lifts and occupancy normalizes.

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Capital Stack

What a $25M Multifamily Bridge Capital Stack Looks Like

At $25 million, specialty bridge debt funds dominate Houston multifamily bridge lending because they tolerate leverage, move fast, and don't require recourse. Borrower selection between fund-backed non-recourse debt and bank balance sheet recourse bridges typically hinges on leverage appetite, timeline pressure, and sponsor balance sheet strength. Most sponsors at this ticket size split the stack to optimize cost and terms, layering a larger non-recourse fund tranche with smaller equity or a mezz piece if LTV requirements demand it.

Capital Source Rate / Cost Size / LTV Notes
Specialty bridge debt fund SOFR + 275 to 325 basis points (8.50 to 9.00 percent all-in) $17.5M to $18.75M (70 to 75 percent LTC on $25M stabilized value) Non-recourse, 30 month term with one 6 month extension option, interest-only first 12 months then amortizing, prepay penalty 2 to 3 percent declining
Regional bank balance sheet SOFR + 225 to 275 basis points (8.00 to 8.75 percent all-in) $6.25M to $7.5M (subordinate tranche or co-lend) Recourse to sponsor, 24 month term, lower spread reflects relationship and balance sheet strength, typically requires 6 month rate lock
Sponsor equity or mezz holder 9.50 to 11.00 percent preferred return or carried interest $0 to $2.5M (gap financing or promote participation) Flexes based on sponsor capital availability, often used to hit precise LTC targets or bridge timing gaps between acquisition and bridge closing
Credit union or portfolio lender Prime + 250 to 300 basis points (8.25 to 8.75 percent all-in) $5M to $10M (secondary lender or full execution) Shorter hold tolerance than banks, typically 18 to 24 month term, recourse, faster underwriting than traditional bank, relationship driven

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 $25M Multifamily Bridge Deal

Typical sponsors for $25 million multifamily bridges in Houston are experienced operators with $100 million plus in AUM, a track record of 5 to 15 completed value-add deals, and deep ties to Houston's submarket dynamics. They are either acquisition-driven (buying off-market or distressed assets) or refinance-motivated (rolling out of agency debt early to unlock equity for new investments). Sponsor net worth typically exceeds $25 to $50 million, with enough liquidity to cover project leasing or CapEx overruns without diluting the bridge capital stack.

From the CLS CRE Pipeline

A Real $25M Example

We closed a $24.8 million bridge for a 287-unit value-add acquisition in the Montrose submarket, sourced from off-market pocket listing. Sponsor was a repeat Houston operator with strong agency relationships and three prior stabilizations in the market. We structured 72 percent LTC across two lenders: a specialty fund at $17.5 million (8.75 percent fixed for 24 months), and a credit union co-lender at $7.3 million (8.50 percent fixed, recourse). The sponsor underwritten $2.1 million in unit interior and common area CapEx over 18 months, targeting rent growth from $1,240 to $1,520 on the 1/1s. Bridge closed in 42 days; sponsor achieved 94 percent occupancy by month 20 and exited into a 5.875 percent agency 25 year loan at $25.3 million, distributing proceeds net of CapEx spend and financing costs.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$25M Bridge Loan Houston Multifamily FAQ

Most bridge lenders assume 5.75 to 6.50 percent exit cap rates depending on property class and submarket. Uptown and Midtown typically model 5.75 to 6.25 percent, while tertiary neighborhoods model 6.00 to 6.75 percent. The spread between entry leverage and exit cap rate directly impacts the LTC lender will offer, so sponsor and lender align closely on stabilized value assumptions during underwriting.
Plan $4,000 to $8,000 per unit in hard and soft CapEx for a repositioning, depending on property age and scope. A 250 unit property at $6,000 per unit translates to $1.5 million, which lenders will require to be funded through the bridge or sponsor liquidity. Lenders review the CapEx budget line-by-line and often require 10 to 15 percent contingency and third-party architect or property manager sign-off.
Most non-recourse debt funds and bank balance sheet bridges offer one 6 month extension option, sometimes two. Extensions typically carry a 0.25 to 0.50 percent rate step-up and require proof of active refinance marketing and lender approval. Sponsors should always plan for the base 24 to 30 month term and treat extensions as optionality, not strategy.
Plan for 5 to 10 percent of the bridge loan amount held in reserve, so $1.25 to $2.5 million. This covers construction cost overruns, leasing delays, and interest shortfalls if NOI doesn't materialize as planned. Lenders may accept 3 to 5 percent if sponsor net worth exceeds $50 million and prior track record is strong, but higher reserve requirements are standard for first-time or less proven operators.
Specialty bridge funds and credit unions typically close in 30 to 45 days from loan application to funding, assuming clean title, stable sponsor profile, and no major environmental or structural issues. Full underwriting (appraisal, Phase 1 environmental, property condition assessment, financial review) takes 3 to 4 weeks. Sponsors should expect to provide 3 years prior tax returns, balance sheet, 1031 exchange documentation if applicable, and detailed business plan with rent and expense comps.


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