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

$5 Million Multifamily Acquisition in Dallas

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $5 million multifamily acquisition in Dallas represents the entry point for institutional capital and the sweet spot for agency execution in the current market. Dallas continues to attract in-migration and employment growth that underpins rental demand across all submarkets, making stabilized and value-add apartment acquisitions viable at modest leverage. Freddie Mac SBL and Fannie Mae Small balance sheet products dominate this loan size, offering 10-year fixed rates in the 6.50 to 6.75 percent range with 30-year amortization and flexibility on property type and borrower experience. Most deals at this level carry 65 to 72 percent LTV and require debt service coverage ratios of 1.25x or higher, making cash flow and market fundamentals the primary underwriting drivers.

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Capital Stack

What a $5M Multifamily Acquisition Capital Stack Looks Like

Agency mortgage products (Freddie SBL and Fannie Small) are the default choice for $5M acquisitions in Dallas because they offer low execution risk, transparent underwriting, and pricing that benchmarks tightly to the 10-year Treasury. Borrowers with moderate experience and stabilized or near-stabilized properties will always price better through agency channels than through banks or life companies, which reserve balance sheet for larger, more complex, or higher-leverage structures.

Capital Source Rate / Cost Size / LTV Notes
Freddie Mac Optigo SBL or equivalent agency program 6.50 to 6.75 percent fixed, 10-year term $5M / 65 to 72 percent LTV Default execution path; 30-year amortization; full recourse or limited recourse with net worth release; 45 to 60 day close; strong appetite for Dallas market
Fannie Mae DUS Small (under $7.5M) 6.55 to 6.80 percent fixed, 10-year term Alternative agency option; identical underwriting rigor; slightly wider pricing range depending on property submarket and sponsor profile
Regional bank balance sheet (acquisition lending) 6.65 to 7.10 percent fixed or floating, 5 to 7 year term $5M / 70 to 75 percent LTV (higher leverage possible) Faster close possible for strong sponsors; may require DSCR 1.20x or lower; recourse almost always required; good fallback if agency process stalls
Debt fund or alternative lender 7.00 to 8.50 percent, typically floating; 3 to 5 year term $5M / 60 to 70 percent LTV Used when agency decline or recourse concerns eliminate bank option; faster approval and closing; exit or refinance mandatory by maturity

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 Acquisition Deal

Typical sponsors closing $5M multifamily acquisitions in Dallas are experienced local or regional operators with 10+ years in multifamily and a portfolio of 200 to 800+ units. Most have $2 to $5 million in liquidity and $10 to $25 million in net worth; they are buying stabilized properties at modest basis or value-add opportunities in supply-constrained submarkets. Common motivations include portfolio consolidation, 1031 exchanges, or operational repositioning in high-demand Dallas corridors.

From the CLS CRE Pipeline

A Real $5M Example

CLS CRE closed a $4.8 million Freddie SBL acquisition for a 110-unit garden-style property in the North Dallas submarket in early 2024. The borrower, an experienced local sponsor with a 400+ unit portfolio, purchased at an 8.5 percent cash-on-cash yield and locked a 10-year fixed rate of 6.62 percent at 68 percent LTV with 1.28x DSCR. The deal closed in 52 days with full recourse and a net worth release at 50 percent paydown. The sponsor immediately began a targeted capital improvement program and achieved 92 percent occupancy within nine months, positioning for a refi or sale in 2026.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$5M Multifamily Acquisition Dallas FAQ

Agency loans (Freddie SBL and Fannie Small) typically close in 45 to 65 days from complete application. The process includes initial underwriting, property appraisal, and borrower documentation review. Bank balance sheet loans can close in 30 to 45 days if the borrower is pre-qualified and the property is clean.
Both Freddie and Fannie programs offer limited recourse options with net worth releases, typically triggered at 50 percent loan paydown or after 5 to 7 years. Full recourse is still the most common structure for borrowers without significant portfolio seasoning or strong liquidity buffers. Banks almost always require full recourse unless the sponsor has $10+ million in net worth and prior banking relationship history.
Agency programs require a minimum DSCR of 1.20x to 1.25x on stabilized properties; value-add or lease-up properties may require 1.15x with performance guarantees or interest-only periods. Banks typically underwrite to 1.20x to 1.25x as well. Stronger cash flow and local submarket fundamentals can support lower DSCR if property quality and sponsor profile are strong.
Agency execution is the default choice because it offers the lowest all-in cost, longest amortization, and highest certainty of execution for stabilized or near-stabilized properties. Banks are appropriate if you need higher leverage (70 to 75 percent LTV), faster closing, or have recourse concerns that disqualify agency programs. Life companies and alternative lenders are a fallback only if agency and bank options decline.
Garden-style and mid-rise apartments, especially Class B and B+ properties with stable occupancy and clear operational history, are the easiest to place. Workforce housing and value-add assets with minor unit-level improvements are also underwritten favorably. Avoid new construction, ground-up development, or Class C properties with stabilization uncertainty, as these require alternative capital or higher recourse.


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