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

$5 Million Multifamily Refinance in Nashville

By Trevor Damyan, Commercial Mortgage Broker at Commercial Lending Solutions

A $5 million multifamily refinance in Nashville represents a sweet spot for agency execution, typically on stabilized garden-style or mid-rise assets in core submarkets like The Nations, Wedgewood-Houston, or established East Nashville corridors. Borrowers at this size are usually looking to extend duration, capture current rate locks in the 5.75 to 5.90 percent range, or pull modest cash out against strong occupancy and rent growth. Nashville's sustained migration and 3 to 4 percent annual rent growth make these assets attractive for term loans, and leverage typically runs 60 to 70 percent LTV depending on debt service coverage. Agency lenders dominate this size because loan economics work well, underwriting is predictable, and 10-year fixed rates offer certainty in a volatile rate environment.

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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 are the primary execution vehicles, capturing roughly 80 percent of permanent financings in this range across Nashville. These platforms are built for borrowers who value speed, transparent pricing, and the full amortization benefit of agency programs, and the lenders' appetite for stabilized multifamily is aggressive in Nashville's expanding market.

Capital Source Rate / Cost Size / LTV Notes
A regional agency lender (Freddie Mac Small Balance or equivalent) 5.75 to 5.95 percent fixed, 10-year term $5M / 60 to 70 percent LTV typical range Primary execution for stabilized assets; full amortization, 25-year schedule; recourse to borrower; 40 to 50 day close timeline; DSCR minimum 1.20x
A regional bank balance sheet lender 5.80 to 6.10 percent fixed, 7 to 10 year term $5M / 65 to 75 percent LTV Fast underwriting, local market knowledge, competitive for owner-occupied or sponsor-heavy portfolios; may offer interest-only period of 1 to 3 years; portfolio hold common
A life company (mortgage subsidiary or insurance affiliate) 5.90 to 6.15 percent fixed, 10 to 12 year term $5M / 55 to 65 percent LTV Less common at this size but available for sponsor relationships; longer prepayment lockout; full documentation; recourse standard; institutional-grade covenant package
A credit union or smaller balance sheet lender 6.00 to 6.25 percent fixed, 5 to 10 year term $5M / 60 to 70 percent LTV Relationship-driven, faster decisions; local Nashville focus; may require borrower member deposit or business relationships; recourse typical

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

Typical sponsors at the $5 million Nashville multifamily refi are seasoned local or regional operators with 5 to 15 properties in their portfolio and $10 to $30 million in net worth, often with some leverage already deployed. They are refinancing to extend maturity dates on maturing debt, lock in rates before potential rate increases, or pull cash for acquisitions or capital improvements on other assets. These borrowers understand underwriting, have clean financials and tax returns, and typically bring strong sponsorship strength (personal guarantees, verifiable income, clean credit) that makes agency lenders comfortable.

From the CLS CRE Pipeline

A Real $5M Example

We closed a $4.8 million permanent refinance on a 48-unit garden complex in South Nashville in Q3 2024 at 5.82 percent fixed, 10-year amortization, 65 percent LTV. The sponsor had owned the property for six years, maintained 94 percent occupancy, and was facing a balloon maturity on construction debt. Using a regional agency platform, we locked the rate in 38 days, achieved a 25-year amortization schedule, and structured full recourse with a DSCR covenant of 1.25x. The borrower pulled modest cash (approximately $200,000) to fund a parking lot overlay and exterior painting, which supported the already-strong operational profile.

Anonymized. All deal references protect borrower and lender identity.

FAQ

$5M Multifamily Refinance Nashville FAQ

Most agency lenders enforce a DSCR floor of 1.20x to 1.30x, tested annually on trailing 12-month debt service. A covenant protects the lender if NOI declines and ensures the borrower maintains adequate cushion; Nashville's strong fundamentals typically support these ratios easily, but covenant violations can trigger acceleration or require refinancing, so borrowers should model downside scenarios.
Freddie Mac Small Balance and Fannie Mae Small programs typically offer full amortization from day one; interest-only periods are available on bank balance sheet products but often come with slightly higher rates or shorter terms. If cash flow is tight, an interest-only rider may be negotiable, but expect a 10 to 15 basis point premium and a cap of 3 to 5 years.
Plan for 35 to 50 days from application to clear-to-close, assuming clean financials, full appraisal cooperation, and no title or environmental surprises. Nashville market liquidity is strong, so appraisals move quickly; delays typically stem from missing tax returns, inconsistent rent rolls, or unknown deferred maintenance.
Agency lenders are generally comfortable with 60 to 70 percent LTV for properties with 1.25x or better DSCR and 90%+ occupancy; bank lenders may stretch to 75 percent for strong sponsors. Nashville's asset quality is solid, but cap rates are compressed (4.5 to 5.2 percent range depending on submarket), so higher LTV often means lower DSCR, which constrains cash-out refinances.
Yes, full recourse to the sponsor is standard across agency, bank, and life company products at this size; non-recourse is extremely rare and would require exceptional asset quality, lower LTV (below 50 percent), and a much higher rate. Recourse is typically structured as an unsecured personal guarantee from principals with at least 10 to 20 percent ownership.


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