$3 Million Bridge Loan for Houston Multifamily
By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions
A $3 million bridge loan for multifamily in Houston typically targets value-add or repositioning plays in secondary submarkets like Midtown, Montrose, or inner-loop corridors where acquisition prices remain moderate but rent growth is measurable. Lenders on deals this size split between specialty bridge debt funds offering non-recourse leverage at 70 to 75 percent LTC and regional banks providing balance sheet bridge at 60 to 65 percent LTC with recourse. Rates float SOFR plus 225 to 275 basis points, settling around 9.50 percent depending on property condition, sponsor experience, and exit certainty. Term is typically 24 to 36 months with one or two extension options, built for a stabilization refinance into agency debt once rents normalize.
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On a $3 million bridge in Houston, specialty debt funds dominate because they accept higher leverage, looser sponsor profiles, and longer hold periods than banks prefer. Sponsor selection matters most: established multifamily operators with prior bridge experience and clear exit strategies can access the most aggressive terms, while first-time bridge borrowers or weak sponsors will face recourse requirements or bank-only options at tighter leverage.
Pricing reflects active CLS CRE quote pipeline as of April 2026. Specific deal pricing depends on sponsor, property, and structure.
Who Closes a $3M Multifamily Bridge Deal
Typical sponsors for $3 million multifamily bridge in Houston are regional or Texas-based operators with 5 to 15 prior multifamily deals, $25 to $75 million net worth, and direct experience with value-add or stabilization. They are motivated by acquisition of class B or C properties with rent-growth upside, refinancing of existing loans into better terms, or repositioning of underperforming assets before stabilization refinance. Many have prior bridge experience and understand the floating-rate environment, exit timeline discipline, and refinance-ready exit strategy required.
A Real $3M Example
A sponsor purchased a 92-unit garden-style property in south Houston with 68 percent in-place occupancy and below-market rents. CLS CRE arranged a $2.8 million bridge from a specialty debt fund at 9.50 percent (SOFR + 250 bps) on a 72 percent LTC basis, with 24 month initial term and one 12-month extension option. The lender required a detailed CapEx budget of $180,000 for unit renovations and common area upgrades, plus a stabilization exit projection assuming 92 percent occupancy at market rents within 18 to 20 months. Sponsor contributed $800,000 equity. After 14 months, the property reached 89 percent occupancy with average rents up 12 percent; the sponsor refinanced into a 7-year agency loan at 5.75 percent, repaid the bridge, and realized a 22 percent IRR on equity.
Anonymized. All deal references protect borrower and lender identity.
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