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

$5 Million Multifamily Refinance in Dallas

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $5 million multifamily refinance in Dallas represents the sweet spot for agency execution, where borrowers can access competitive permanent financing on stabilized assets without the complexity or cost of larger institutional programs. Dallas multifamily fundamentals remain resilient, with steady rent growth and occupancy rates that support leverage in the low to mid 70 percent LTV range. At current market conditions, a $5M refi on a class B or class C asset will price around 5.80 percent on a 10-year fixed or floating rate structure, depending on the sponsor's balance sheet strength and the property's trailing 12-month operating performance. This loan size attracts both agency lenders and regional bank balance sheets, each competing on rate and execution speed.

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Capital Stack

What a $5M Multifamily Refinance Capital Stack Looks Like

At $5 million, Freddie Mac Small Balance and Fannie Mae Small Multifamily loans are the dominant execution paths, chosen by most Dallas sponsors because they offer tight spreads, long fixed-rate terms, and streamlined underwriting. A small number of regional banks and credit unions will also compete directly on balance sheet programs, but agency programs control pricing and capacity in this band. Lender selection typically hinges on property quality, sponsorship track record, and the borrower's appetite for rate certainty versus floating rate upside.

Capital Source Rate / Cost Size / LTV Notes
Freddie Mac Small Balance (Optigo SBL) 5.70 to 5.90 percent fixed, 10-year amortization $5M / 70 to 75 percent LTV typical Fastest execution, 45 to 60 day close, full recourse or limited recourse depending on sponsor net worth, strong market presence in Dallas, no prepayment penalty after year 3
Fannie Mae Small Multifamily DUS 5.75 to 5.95 percent fixed, 10-year amortization $5M / 70 to 75 percent LTV typical Comparable speed to Freddie, slightly more flexibility on property condition and sponsor profile, recourse options available, 50 to 65 day close timeline typical
Regional bank balance sheet 5.50 to 6.00 percent floating or fixed, tied to SOFR or prime $5M / 65 to 72 percent LTV, typically lower leverage Shorter terms (5 to 7 years), relationship pricing available, more customization on covenants and DSCR triggers, underwriting 30 to 45 days
Life company whole loan (off-balance-sheet program) 5.95 to 6.20 percent fixed, 10-year amortization $5M / 65 to 70 percent LTV, rarely deployed at this size Slower execution (75 to 90 days), not competitive on rate at $5M, occasionally used for non-standard or value-add properties, minimal prepayment penalty

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

A typical $5 million multifamily refi sponsor in Dallas is an experienced operator with 5 to 15 prior deals, a net worth of $3 to $8 million, and a strong local market presence or regional reputation. These borrowers are usually refinancing a stabilized property they acquired 3 to 5 years prior, seeking to unlock equity, pay down partners, or recapitalize for acquisition volume. Sponsors at this level often manage their own assets or partner with a local property management company, demonstrating solid operational metrics (occupancy above 90 percent, expense ratios in line with market) that make them attractive to agency lenders.

From the CLS CRE Pipeline

A Real $5M Example

CLS CRE closed a $4.85 million Freddie Mac SBL refinance on a 142-unit class B garden-style asset in the Irving submarket in Q4 2025. The borrower was a local Dallas developer with nine prior multifamily acquisitions and a strong payment history across its portfolio. The property carried a 72 percent LTV, a 1.32x DSCR on trailing 12-month net operating income, and priced at 5.81 percent fixed for 10 years with full recourse. The loan closed in 48 days, and the borrower used proceeds to fund a portfolio acquisition north of Dallas and to distribute capital to its equity partners.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$5M Multifamily Refinance Dallas FAQ

Most agency lenders (Freddie and Fannie) will approve 70 to 75 percent LTV on stabilized multifamily in Dallas, provided the property has solid occupancy (above 90 percent) and reasonable expense ratios. Regional banks may go lower, typically 65 to 72 percent LTV, especially on balance sheet programs. The specific LTV depends on property age, unit count, and sponsorship strength.
Agency programs (Freddie SBL and Fannie Small DUS) typically close in 45 to 65 days from clear conditions, assuming clean underwriting files and strong sponsor documentation. Regional banks can sometimes move faster (30 to 45 days) on relationship deals with familiar borrowers, but overall timeline depends on appraisal turnaround and title clarity.
At $5.80 percent on a 10-year fixed, most sponsors lock in today because the long-term certainty aligns with permanent hold strategies and refinance discipline. Floating-rate options (typically 50 to 75 basis points cheaper initially) attract only sponsors planning a 3 to 5 year exit or those with strong rate hedging discipline. Agency products favor fixed-rate execution at this size.
Agency lenders typically require a minimum 1.25x DSCR on trailing 12-month or year-to-date NOI for acquisition or value-add deals, and 1.20x for stabilized refi programs. Regional banks may go lower (1.15x to 1.20x) depending on sponsorship and property vintage. DSCR covenant structures vary; most agencies build in a 1.10x to 1.15x cash flow maintenance covenant during the loan term.
Freddie SBL typically offers no prepayment penalty after year 3, with a yield maintenance or defeasance penalty years 1 to 3. Fannie Small DUS usually follows a similar structure, sometimes with a 1 percent penalty in years 1 to 2. Regional bank loans often have steeper penalties (2 to 3 percent) or longer lock periods; life company programs offer minimal penalty after year 3.


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