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

$25 Million Multifamily Refinance in Houston

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $25 million multifamily refinance in Houston represents the sweet spot where institutional agency and life company capital converge, offering borrowers stable 10-year execution with moderate leverage. Houston's multifamily market remains resilient post-2023, with trophy Class A and well-stabilized Class B assets attracting significant refinance volume from sponsors looking to lock in permanent debt after acquisition or value-add repositioning. At $25M, you're pricing off the 10-year Treasury plus agency guarantee fees or life company spreads in the 225 to 275 basis points range, translating to all-in rates of 5.50 to 6.00 percent depending on property quality and sponsor credit. Most sponsors at this size carry 60 to 70 percent loan-to-value targets, delivering debt service coverage ratios of 1.25x to 1.40x on stabilized cash flow.

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Capital Stack

What a $25M Multifamily Refinance Capital Stack Looks Like

At $25 million, life companies and agency DUS lenders dominate the execution landscape in Houston, with life company balance sheets increasingly competitive on spreads and structural flexibility. The decision between agency and life company typically hinges on leverage appetite (life companies will go deeper on LTV), sponsor strength, and property quality, though many sponsors execute both simultaneously to optimize execution timing and terms.

Capital Source Rate / Cost Size / LTV Notes
Life company 5.40 to 5.75 percent on 10-year fixed $25M at 60 to 70 percent LTV Full recourse typical; 30 to 45 day close; larger leverage capacity; strong pricing on mid-tier Houston properties
Agency DUS (Freddie/Fannie) 5.55 to 6.10 percent on 10-year fixed $25M at 55 to 65 percent LTV Non-recourse or limited recourse carveouts; 60 to 90 day close; requires seasoning on recent acquisitions; strict underwriting on rent growth and reserves
Regional bank balance sheet 5.65 to 6.25 percent on 10-year fixed $12M to $20M (co-lender structure common) Recourse to sponsor or parent entity; 30 to 60 day close; best for sponsors with existing banking relationships; Houston-based lenders familiar with market dynamics
Freddie/Fannie Small DUS (if property < $25M portfolio appraised value) 5.50 to 5.95 percent on 10-year fixed $10M to $25M at 55 to 70 percent LTV Lower pricing than standard DUS; 60 to 75 day close; limited seasoning requirements; no interest-only period; full prepayment penalty structure

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 Refinance Deal

The typical sponsor closing a $25 million multifamily refinance in Houston is an experienced regional or platform operator with 10+ years in the market, $300 million+ in AUM, and a track record of 5 to 15 completed transactions. Sponsors at this level are refinancing to monetize 18 to 36 months of value-add execution, reposition debt post-acquisition at lower rates, or fund 1031 exchanges into larger or higher-return assets elsewhere in Texas. Most carry strong personal guarantees, demonstrate institutional GP processes, and have worked with multiple lenders across multiple market cycles.

From the CLS CRE Pipeline

A Real $25M Example

CLS CRE closed a $25.2 million life company permanent refinance on a 164-unit Class B garden-style apartment community in the inner southwest Houston submarket. The borrower, an experienced Houston-based operator, acquired the property two years prior, repositioned unit-level amenities and management, and achieved a 5.2 percent rent growth rate. The deal priced at 5.52 percent on a 10-year fixed rate non-amortizing first two years, with 67 percent LTV and a 1.38x DSCR, closing in 34 days with minimal condition carryforward. The sponsor used the loan proceeds to fund a 1031 exchange into a larger portfolio acquisition in North Dallas, reinforcing the refinance as a strategic capital recycling event rather than a rate-and-term reset.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$25M Multifamily Refinance Houston FAQ

Life companies will typically lend up to 70 to 75 percent LTV on Class B assets with stabilized rent rolls, while agencies tend to cap at 65 to 70 percent. Property quality, debt service coverage ratio, and sponsor credit profile drive the delta; Class A trophy assets with strong operational history may qualify for 75 to 80 percent life company leverage, while older or disrupted properties might max out at 55 to 60 percent.
Agency DUS typically prices 10 to 35 basis points higher than life company but offers non-recourse or carve-out recourse structures, which many sponsors prefer despite the higher rate. Close timelines are longer (60 to 90 days vs. 30 to 45 days), underwriting is more rigid on rent growth and renovation support, and there are stricter seasoning requirements on recent acquisitions, making life company the faster and often more flexible execution when timing is critical.
Yes. At $25M and below, life company balance sheets and agency DUS are the core executions. Once you exceed $30M, the pricing benefits from institutional scale, and CMBS becomes viable alongside life company if you're seeking yield leverage or specific structural features. The $25M mark sits right at the threshold where life companies will still compete aggressively on rate and terms, making it an optimal sweet spot for borrowers seeking stable pricing and reasonable execution speed.
Most lenders require a minimum DSCR of 1.20x to 1.25x at stabilization, with many loans structured at 1.30x to 1.40x on the pro forma underwriting. Interest-only periods (typically 2 to 5 years for life companies) can relax effective DSCR in early years, but amortizing debt service coverage typically bottoms out at 1.15x to 1.20x in stressed scenarios or market downturns.
At $25 million, sponsorship is the primary driver of pricing tiers; a first-time or out-of-state sponsor will pay 25 to 50 basis points more than an established Houston operator with 20+ years and a strong track record. Larger, institutional-quality sponsors with robust GP infrastructure and diversified portfolios also negotiate more favorable leverage (5 to 10 points higher LTV), longer amortization periods, and extended interest-only windows, making market reputation and operating credibility material economic variables.


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