$5M Multifamily Refinance Austin | Commercial Lending Solutions 
Loan Size Example

$5 Million Multifamily Refinance in Austin

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $5 million multifamily refinance in Austin represents the sweet spot for agency execution and portfolio lender appetite. These deals typically involve stabilized garden-style or mid-rise complexes in established submarkets like South Austin, North Austin, or the Central Business District, with DSCR running 1.20x to 1.40x and LTV between 65 to 75 percent. Austin's strong rent growth and institutional investor presence keep execution timelines tight and rate competition active. The $5M size attracts both agency platforms and balance sheet lenders eager for steady, lower-leverage collateral.

Get a Quote on Your $5M Deal →
Capital Stack

What a $5M Multifamily Refinance Capital Stack Looks Like

Freddie Mac Optigo Small Balance Lending and Fannie Mae DUS Small dominate this tier in Austin. Borrowers with strong credit and stabilized operations gravitate toward agencies for certainty of execution and 30-year amortization, while some sponsors pursuing rate-and-term refinances explore bank balance sheet alternatives when leverage targets exceed agency comfort or when speed matters more than rate optimization.

Capital Source Rate / Cost Size / LTV Notes
Freddie Mac SBL (agency) 5.65 to 6.00 percent $5M full loan amount; typical LTV 70 percent 10-year Treasury plus 165 to 190 bps; full recourse or limited recourse available; 45-day close typical; interest-only periods available up to 5 years depending on sponsor credit and property condition
Fannie Mae DUS Small (agency) 5.70 to 6.10 percent $5M full loan amount; typical LTV 70 percent 10-year Treasury plus 170 to 195 bps; recourse limited to sponsor net worth and replacement reserve covenant; execution window 50 to 60 days; seasoned properties with stabilized leasing preferred
Regional bank balance sheet 5.55 to 5.95 percent $5M; typical LTV 65 to 72 percent Faster execution (30 to 40 days); requires stronger sponsor relationship and/or significant deposit relationships; DSCR covenant typically 1.15x to 1.25x; recourse often full or partial depending on sponsor profile and loan terms
Credit union portfolio 5.80 to 6.20 percent $5M; typical LTV 68 to 75 percent Membership or geographic tie-in often required; 8 to 10 year fixed periods common; slower process (60 to 90 days) but flexible on debt service and occupancy; recourse negotiable

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 Refinance Deal

The typical $5M multifamily refinance borrower in Austin is an experienced operator with $50 million to $250 million in portfolio AUM and a track record of 5 to 15 multifamily assets across multiple vintages. These sponsors are usually refinancing stabilized properties to extend the hold, pull out equity for reinvestment, or step down leverage after a period of value-add execution. Net worth requirements range from $10 million to $25 million depending on lender; most have existing banking relationships and manage portfolios with strong operational discipline.

From the CLS CRE Pipeline

A Real $5M Example

A 186-unit garden-style complex in North Austin built in 2005 with recent unit renovations was refinanced for $4.8 million at 5.78 percent through agency execution. The property was stabilized at 94 percent occupancy with rents in the $1,050 to $1,350 range; DSCR ran 1.32x on a full underwriting basis. The borrower, an Austin-based partnership with prior Freddie SBL experience, executed a 10-year amortization with 5 years interest-only and recourse capped at the replacement reserve. Closing occurred in 42 days; the sponsor used the transaction to reset the rate on a 2019 balloon and fund a supplemental capital improvement reserve.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$5M Multifamily Refinance Austin FAQ

Both agencies prefer stabilized properties at 90 percent or higher occupancy with trailing 12-month rent rolls within 5 to 8 percent of underwritten rents. For value-add scenarios, Freddie SBL will accept 85 percent occupancy with a clear 90-day ramp plan; Fannie DUS Small is more conservative and prefers stabilized deals. Austin's rental market strength means most refi borrowers easily meet these thresholds.
Agency lenders typically cap LTV at 70 to 75 percent on stabilized multifamily, which limits cash-out on most Austin deals to 5 to 12 percent of current market value depending on original purchase price and recent capital improvements. Bank balance sheet lenders may go 72 to 75 percent LTV if DSCR supports it and sponsor profile is strong; regional credit unions occasionally underwrite up to 80 percent LTV for existing members.
Agency execution (Freddie SBL or Fannie DUS Small) typically closes in 45 to 60 days from application to funding, provided the borrower has clean title and tax records. Bank balance sheet lenders compress this to 30 to 45 days. Appraisals in Austin move quickly due to market activity, but underwriting depth and sponsor doc collection often drive the real timeline variability.
Bank balance sheet lenders occasionally price 10 to 20 bps tighter than agency offerings, particularly if the borrower brings meaningful deposit or cash management relationships. However, the rate advantage often evaporates when factoring in faster execution, lower fees, or longer amortization available from agencies. The real decision driver is typically execution timeline, leverage tolerance, and recourse structure rather than raw rate.
Freddie SBL and Fannie DUS Small typically covenant DSCR at 1.15x to 1.25x annually, with some flexibility for seasonal properties or those with trailing 12-month performance above 1.35x. Bank lenders vary by credit union typically sets covenants at 1.10x to 1.20x. Austin's strong operational environment and low vacancy mean most borrowers stay well above covenant thresholds; covenant breaches are rare and usually driven by market corrections rather than property-level underperformance.


Get a Quote on Your $5M Deal

Tell us about your transaction. We will run it past lenders that actively fund this size and product type and send back terms within 48 hours.

Apply for Financing →
Or call us: 310.708.0690

Weekly Market Intelligence

Rate updates, deal insights, and capital markets analysis. One email per week. Unsubscribe anytime.

No spam. No selling your data. Just market intelligence from a working broker.

Need financing? Apply in 2 minutes. Response within 24 hours.
Apply Now →
📈

Before You Go…

Get matched with the right lender from our network of 1,000+ capital sources.

Or call us: 310.708.0690

No spam. Unsubscribe anytime.