$5M Bridge Loan Dallas Multifamily | Commercial Lending Solutions 
Loan Size Example

$5 Million Bridge Loan for Dallas Multifamily

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $5 million multifamily bridge loan in Dallas represents a mid-market value-add or acquisition play, typically targeting a 100 to 150-unit garden or mid-rise asset in growth corridors like Deep Ellum, Oak Cliff, or northeast Dallas. Lenders in this range split between specialty bridge debt funds offering non-recourse structures at 70 to 75 percent LTC and bank balance sheet bridges at 60 to 65 percent LTC with recourse requirements. Rates currently run 9.0 to 9.5 percent on a SOFR-plus basis, reflecting tighter spreads than 2023 but still pricing execution risk and the 24 to 36-month hold timeline required for repositioning and lease-up.

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Capital Stack

What a $5M Multifamily Bridge Capital Stack Looks Like

At the $5 million tier, specialty bridge debt funds dominate Dallas multifamily bridge lending because they tolerate higher leverage, shorter time horizons, and the business plan volatility that bank balance sheet lenders avoid. A sponsor's decision between debt fund and bank capital typically hinges on required LTC, recourse appetite, and exit certainty; if the CapEx budget is proven and the submarket fundamentals are solid, a debt fund can close faster and offer non-recourse protection that appeals to equity partners.

Capital Source Rate / Cost Size / LTV Notes
Specialty bridge debt fund (non-recourse preferred) 9.0 to 9.5 percent all-in on SOFR-plus, 150 to 200 basis points above SOFR $3.5 to $3.75 million at 70 to 75 percent LTC Non-recourse structure typical; floating rate; 24 to 36-month term with one 12-month extension option; emphasis on stabilized NOI and exit cap not to exceed 6.5 to 7.0 percent
Regional bank (recourse or limited non-recourse) 8.75 to 9.25 percent SOFR-plus, 125 to 175 basis points $2.5 to $3.0 million at 60 to 65 percent LTC Recourse required from sponsor; slightly lower rate if sponsor has deposit relationship; prefers established operators with 5+ deals in Dallas metro; 24 to 30-month term
Mezzanine equity or preferred equity (if required) 12 to 14 percent preferred return plus 20 to 25 percent backend promote $500k to $1.0 million fill gap if bridge and bank stack leaves shortfall Typically family office or local Dallas investor; helps sponsor reach initial funding without additional leverage; used for contingency or CapEx cushion
Sponsor equity Equity contribution required at 20 to 30 percent total project basis $1.5 to $2.0 million of the $5M project (not the bridge loan itself) Debt fund bridge assumes 25 to 30 percent equity in the deal; bank bridge may require 35 to 40 percent equity; equity can include existing property basis or new investor capital

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 $5M Multifamily Bridge Deal

A typical sponsor closing a $5 million bridge in Dallas is either a mid-sized local or regional operator with a track record of 3 to 8 completed multifamily value-add deals and $50 to $200 million in AUM, or an established single-asset sponsor looking to acquire and reposition an in-place multifamily property. Motivations include acquiring a property with 60 to 75 percent occupancy in a supply-constrained Dallas submarket, funding a 12 to 18-month lease-up and capital expenditure plan (typically $8k to $15k per unit for unit and common area upgrades), or refinancing out of a longer-term bank loan at a lower rate once stabilization is achieved. Debt fund lenders expect a clear exit via agency (Fannie Mae or Freddie Mac) refinance within 30 to 36 months; sponsors with skin in the game (25 to 30 percent equity) and documented CapEx budgets close faster.

From the CLS CRE Pipeline

A Real $5M Example

CLS CRE closed a $4.8 million bridge for a 118-unit garden-style property in north Dallas (approximately 65 percent occupied at loan origination) at 9.25 percent all-in, 72 percent LTC via a specialty debt fund. The sponsor, a local operator with four prior value-add deals in the DFW market, planned 14 months of repositioning including unit renovations, amenity upgrades, and aggressive leasing; the business plan projected stabilization at 92 percent occupancy and a 6.0 percent stabilized cap. Loan included a 24-month initial term with one 12-month extension option, SOFR-plus pricing, and a non-recourse structure backed by a personal guarantee limited to fraud and misappropriation. The sponsor exited via agency refinance at month 26, locking in a 6.75 percent 10-year fixed rate and paying the bridge off in full without extension.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$5M Bridge Loan Dallas Multifamily FAQ

Bridge debt funds price for execution risk, short hold periods, business plan uncertainty, and the cost of floating-rate funding. A bridge lender absorbs the risk that lease-up misses plan, CapEx overruns, or market softening delays the refinance exit. Agency loans require stabilized occupancy and seasoned history; bridges fund the path to stabilization and accept temporary leverage spikes and occupancy dips as normal.
Most debt fund bridges in Dallas assume a 6.0 to 7.0 percent stabilized exit cap; if stabilized NOI is projected at $650k, the lender models a $65k to $75k annual debt service, or a $1.3 to $1.5 million loan payoff via agency refinance. If the exit cap widens past 7.0 percent due to rate rises or market deterioration, the borrower's refinance may not be possible at the planned LTV, forcing an extension or additional equity injection. Sponsors must stress-test their exit assuming a 25 to 50 basis point cap-rate widening from current market.
Most specialty bridge debt funds close on a pre-funding basis, meaning appraisal and Phase I are delivered before first advance; some lenders allow Phase I to follow within 30 days if title is clear and there are no obvious environmental red flags. Banks typically require both pre-closing and will not fund until the appraisal supports the LTC and property condition aligns with CapEx budget assumptions. Plan 2 to 3 weeks for appraisal turnaround in Dallas; rushed appraisals can slip the closing date by 10 to 15 days.
Yes, bridge lenders routinely close on properties at 55 to 70 percent occupancy as long as the lease-up plan is credible, unit economics support the NOI projection, and CapEx budget is detailed and contractor-quoted. The lender will use in-place NOI (actual rents collected) plus a modest absorption assumption to underwrite the stabilized NOI; they are funding the value creation, not the current cash flow. However, if occupancy is below 50 percent or there are major capital defects, some lenders will reduce LTC to 65 percent or require additional equity.
Most bridge loans include a one-year extension option (often at 75 to 100 basis points higher rate) that allows the sponsor to buy time if rates remain elevated or stabilization lags. If the extension is not available or is exhausted, the sponsor must either pay down principal to meet refinance criteria, inject additional equity, sell the asset, or negotiate a transition loan or take-out from a debt fund. The key is having a contingency plan in the original business plan; lenders will ask what happens if the exit window closes.


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