Commercial Real Estate Loans in Texas Now

Commercial Real Estate Loans in Texas: Complete 2025 Guide for Investors

Texas in 2025 continues to stand out as a powerhouse for commercial real estate investors, offering both rapid growth and diverse property opportunities. Whether you’re targeting high-rise office towers in Houston, mixed-use complexes in Dallas, or retail developments in San Antonio, understanding the landscape of commercial real estate loans in Texas is a crucial first step for any investor in 2025.

Texas Commercial Real Estate Market Overview

With steady population growth, significant in-migration, and continued business expansion, Texas cities are among the nation’s most active for commercial real estate activity. As of early 2025:

• Dallas-Fort Worth: Leading in industrial and logistics, with major redevelopment in Uptown, Frisco, and Plano.
• Houston: Experiencing a resurgence in Class A office space and medical centers in The Galleria, Midtown, and the Texas Medical Center districts.
• Austin: Tech sector is fueling demand in East Austin and The Domain for mixed-use and multifamily projects.
• San Antonio: Growth in hospitality and retail in Pearl District and Stone Oak.
• El Paso: Regional retail corridors and warehousing are attracting cross-border investment.
• Fort Worth: Key redevelopment around Stockyards District and AllianceTexas.
• Corpus Christi: Harbor revitalization and logistics-focused commercial properties.
• Waco: Demand for student housing and healthcare properties near Baylor University and medical corridors.

Popular Texas Commercial Loan Types

This guide focuses on Commercial Mortgages for stabilized income-producing properties—ideal for office, industrial, retail, and self-storage deals throughout Texas in 2025. Other available financing options include:

Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!

Test Your Expertise: The Complexities of the 1031 Exchange

As a sophisticated real estate investor, you understand that the 1031 Exchange is a cornerstone strategy for tax deferral and wealth accumulation. But beyond the basics, the intricacies of the 1031 Exchange rules can pose significant challenges. This quiz is designed to test your in-depth knowledge and highlight critical nuances that separate casual investors from true experts in 1031 Exchange transactions.

Instructions: Choose the best answer for each question.

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Page 1 of 5

Question 1: Understanding "Like-Kind" in a 1031 Exchange

Which of the following scenarios most likely qualifies as a like-kind property exchange under IRS Section 1031, allowing for 1031 Exchange tax deferral?

a) An investor exchanges a portfolio of publicly traded REIT stocks for a commercial retail building. b) An investor exchanges their primary residence, used for personal living for 15 years, for a duplex intended for rental income. c) An investor exchanges raw land held for appreciation in Texas for a stabilized apartment complex in Florida, both held for investment. d) An investor exchanges a classic car collection (personal property) for a single-family rental home (real property).

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Question 2: Navigating the 45-Day Identification Period for a 1031 Exchange

An investor sells a multi-family property on June 15th for a 1031 Exchange. According to the strict timelines, by what date must they identify their replacement properties to comply with the 1031 Exchange requirements?

a) July 30th of the same year, as the 45-day period includes weekends and holidays. b) August 29th of the same year, allowing for an extra 45 days if needed. c) December 12th of the same year, aligning with the 180-day completion period. d) January 1st of the following year, if they plan to file for an extension.

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Question 3: The Role of a Qualified Intermediary (QI) in a 1031 Exchange

Why is the engagement of a Qualified Intermediary (QI) absolutely critical for the validity of a 1031 Exchange?

a) The QI provides investment advice and helps the investor choose the best replacement property for their 1031 Exchange strategy. b) The QI acts as a liaison with the IRS, directly negotiating tax liabilities related to the 1031 Exchange process. c) The QI holds the proceeds from the relinquished property's sale, preventing the investor from having "constructive receipt" of funds, which would invalidate the 1031 Exchange. d) The QI provides legal and tax advice to ensure the 1031 Exchange is perfectly compliant

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Question 4: Understanding "Boot" and its Impact on a 1031 Exchange

An investor sells a commercial building with $500,000 in equity for a 1031 Exchange. They purchase a replacement property for $450,000, effectively reducing their debt by $50,000. What is the tax implication of this scenario within the 1031 Exchange framework?

a) The entire 1031 Exchange is disqualified because the investor "traded down" in value. b) The $50,000 in reduced debt is considered "boot" and will be immediately taxable as partial gain in this 1031 Exchange. c) There are no immediate tax implications, as the primary goal of the 1031 Exchange is only about the "like-kind" nature of the properties. d) The investor can defer the $50,000 as long as they pay off other personal debts with the funds, still qualifying for a full 1031 Exchange.

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Question 5: Advanced 1031 Exchange Strategies & Flexibility

An investor aims to sell a highly appreciated single-tenant retail property and replace it with multiple smaller, diversified multi-family units to spread risk. Which of the following 1031 Exchange identification rules best allows for this diversification strategy, maintaining eligibility for a 1031 Exchange?

a) The "Three Property Rule," where the investor can identify up to three properties of any value, regardless of the relinquished property's value, for their 1031 Exchange. b) The "200% Rule," allowing identification of any number of properties, provided their aggregate fair market value does not exceed 200% of the relinquished property's value for the 1031 Exchange. c) The "95% Rule," which states that if more than three properties are identified, the investor must acquire at least 95% of the aggregate value of all identified properties to qualify for the 1031 Exchange. d) All of the above are valid identification rules within a 1031 Exchange, offering flexibility for various investment strategies.

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The Ultimate DSCR Loan for Rental Property Quiz

Are you looking to expand your real estate investment portfolio? A DSCR loan might be the perfect tool to help you achieve your goals without relying on traditional income documentation. Test your knowledge with this quiz to see if you're ready to master the intricacies of a DSCR loan for rental property.

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Page 1 of 5

What is the primary factor a lender considers when approving a DSCR loan for rental property? A) The borrower's personal income and debt-to-income (DTI) ratio. B) The borrower's credit score and employment history. C) The property's potential rental income compared to its monthly expenses, known as the Debt Service Coverage Ratio. This is the key metric for a DSCR loan for rental property eligibility and approval. D) The total value of the borrower's existing investment properties and personal savings.

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How does a DSCR loan for a rental property differ from a conventional mortgage for a personal residence? A) A conventional mortgage requires a DSCR calculation, whereas a DSCR loan for a rental property does not. B) A DSCR loan for a rental property primarily focuses on the property's cash flow, allowing investors to qualify without traditional income verification, unlike a conventional mortgage which is based on personal income and liabilities. C) A conventional mortgage has a higher interest rate and stricter requirements than a DSCR loan for a rental property. D) A DSCR loan for a rental property is only available for commercial properties, not residential rental properties.

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What is an ideal Debt Service Coverage Ratio (DSCR) for a lender when evaluating a DSCR loan for a rental property? A) A DSCR of 0.75, indicating the property generates 75% of the income needed to cover its debt service. B) A DSCR of 1.00, meaning the property's income exactly equals its debt service. C) A DSCR of 1.25 or higher, as this indicates the property's income is greater than its expenses, making it a strong candidate for a DSCR loan for a rental property and providing a buffer for unexpected costs. D) A DSCR of 2.00, which is the standard minimum for all investment properties, regardless of location or market conditions.

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Which of the following expenses are typically included in the calculation of the Debt Service Coverage Ratio for a DSCR loan for a rental property? A) The property's mortgage payment (principal and interest), property taxes, and insurance, which are the core components used to determine if the property can support the debt. B) The property's mortgage payment, property taxes, insurance, and the borrower's personal credit card debt. C) The property's monthly rental income and all utility bills, regardless of who pays them. D) Only the principal and interest payment of the loan, as other expenses are not considered in a DSCR loan for a rental property calculation.

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Who would most benefit from using a DSCR loan for a rental property? A) A first-time homebuyer with a W-2 salary and a high debt-to-income ratio, who is looking to purchase a primary residence. B) A seasoned real estate investor with multiple properties who wants to expand their portfolio without using personal income to qualify, making a DSCR loan for a rental property the ideal financing solution for their needs. C) Someone looking to finance a primary residence with a low down payment and a government-backed loan. D) An individual with a very low credit score who cannot qualify for any other type of loan.

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• Bridge Loans
• Construction Loans
• Multifamily Financing

Key Lenders for Texas Commercial Property Loans

Several national and regional lenders offer competitive loan programs tailored for Texas real estate investors. Here are five actively funding commercial mortgages in 2025:

1. Frost Bank — Texas-headquartered, specializes in office, medical, and mixed-use property loans ($500K to $15M+).
2. Comerica Bank — Strong metro presence with flexible fixed and floating-rate options.
3. Veritex Community Bank — Mid-sized commercial loans with streamlined approvals ($1M to $10M).
4. Chase Commercial Banking — Full-service, national platform with deep Texas market knowledge.
5. Texas Capital Bank — Custom commercial mortgage products for retail, industrial, and hospitality.

How Commercial Mortgages Work in Texas (2025 Edition)

Most Texas commercial mortgages offer the following terms:

• Loan Amounts: $500,000 to $50,000,000+ (most mid-market deals $1M–$5M)
• Loan-to-Value (LTV): Up to 75% for stabilized properties. Some lenders allow up to 80% for multifamily.
• Interest Rates: Fixed rates from 6.25%–7.75%. Floating rate spreads tied to SOFR or Prime + 2.0%–3.5%.
• Amortization: Typically 20–30 years, with 5–10 year fixed term and balloon payment or reset.
• Recourse: Both recourse and non-recourse options available; larger loans lean non-recourse.
• Prepayment: Yield maintenance or step-down structures.

✅ Small Business Resources 

• SBA – Small Business Administration
  https://www.sba.gov

• SCORE Mentors (Free Mentoring & Workshops)
  https://www.score.org
• Small Business Development Centers (SBDC)
  https://americassbdc.org

Are You an SBA Real Estate Loan Expert?

Test your in-depth knowledge on using SBA Loans for owner-occupied commercial Real Estate acquisition. These questions delve into the critical details that can impact your business's growth and financial strategy.

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Page 1 of 5

For an existing commercial property, what is the minimum owner-occupancy percentage required for an SBA 7(a) real estate loan, and does this specific scenario qualify?

A manufacturing company plans to acquire a 30,000 sq ft industrial real estate facility using an SBA 7(a) Loan. The company initially needs 18,000 sq ft for its operations and intends to lease out the remaining 12,000 sq ft.

A) 60%; Yes, it qualifies. B) 51%; Yes, it qualifies. C) 75%; No, it does not qualify. D) 60%; No, it does not qualify, as they are leasing out a portion.

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Which of the following sets most accurately represents additional cost categories that can typically be financed within an SBA 504 Loan for a commercial real estate project?

Hint: Beyond the straightforward purchase of a commercial real estate property, an SBA 504 Loan is highly effective for comprehensive projects.

A) Business inventory, working capital, and employee salaries. B) Building renovations, long-term machinery essential to operations within the property, and soft costs like architectural fees. C) Advertising expenses, short-term equipment leases, and utility deposits. D) Personal real estate investments, vehicles for personal use, and stock market investments.

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Between an SBA 7(a) Loan and an SBA 504 Loan, which program generally offers the lowest typical borrower down payment for a commercial real estate acquisition, and what is that common minimum percentage for established businesses?

A highly profitable professional services firm in a competitive market wants to purchase its office real estate with minimal upfront capital. The firm's owners prioritize cash flow and liquidity.

A) SBA 7(a) Loan; 15% B) SBA 504 Loan; 10% C) SBA 7(a) Loan; 5% D) SBA 504 Loan; 20%

Page 4 of 5

For new construction, what is the initial minimum owner-occupancy percentage required, and what is the maximum timeframe to meet the full owner-occupancy threshold, for an SBA Real Estate Loan?

A fast-growing tech startup plans to construct a new 50,000 sq ft headquarters using an SBA Loan. They will immediately occupy 35,000 sq ft and have a definitive plan to occupy the remaining 15,000 sq ft within two years as their team expands.

A) Initial 51%, full 80% within 5 years. B) Initial 60%, full 80% within 3 years. C) Initial 75%, full 100% within 1 year. D) Initial 51%, full 100% within 2 years.

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What is this crucial requirement, and what fundamental principle does it underscore for the lender?

When securing an SBA Loan for a commercial real estate purchase, principal owners with a 20% or greater ownership stake are almost universally required to provide a specific type of assurance beyond the collateral of the real estate itself.

A) A fixed-rate interest payment commitment, demonstrating long-term stability. B) A first-lien position on all personal assets, ensuring full recovery. C) A personal guarantee, signifying the owners' personal commitment to loan repayment. D) A business plan with projected revenue growth of at least 15% annually, showing future viability.

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Texas investors frequently use commercial mortgages for office buildings in Dallas, retail centers in Houston, or industrial warehouses along the I-35 corridor.

Step-by-Step Texas Commercial Mortgage Application Process

1. Initial Consultation: Connect with a Texas-licensed commercial mortgage broker or lender to discuss your project and financing goals.
2. Loan Request Submission: Provide property details, borrower financials, leases, rent roll, and photos.
3. Pre-Approval & Term Sheet: Lender issues indicative terms outlining loan amount, rate, amortization, and fees.
4. Due Diligence: Full underwriting—appraisal, environmental report (Phase I), title review, credit/background checks, and cash flow analysis.
5. Commitment Letter: Agree to finalized terms and deposit any due diligence fees.
6. Legal and Documentation: Attorneys draft and review loan docs, including mortgage/deed of trust, assignments, and guarantees as required.
7. Closing: Fund transfer, loan recording, and property ownership updates. Investor assumes new debt service obligations per the agreed schedule.

Success Stories: Texas Commercial Mortgage Closings in 2025

• Houston Office Redevelopment: A Houston-based investment group secured a $3.2 million commercial mortgage from Texas Capital Bank—7.2% fixed for 10 years, 25-year amortization—to reposition a medical office in The Galleria. The loan-to-value was 72% with full non-recourse structure. Improved leasing brought property value up 20% within the first year.
• Dallas Industrial Portfolio: A DFW logistics developer refinanced three warehouses with a $5 million Frost Bank commercial mortgage (6.65% fixed, 10-year term). Non-recourse, 75% LTV, interest-only for year one. Portfolio occupancy jumped from 70% to 92% within 18 months.
• Austin Retail Strip Center: Private investors acquired a fully leased shopping center with a $1.1 million Veritex Community Bank loan—7.5% fixed for 7 years, 30-year amortization, closed in under 45 days. Strategic lease renewals drove a 17% NOI increase after 14 months.
• San Antonio Hospitality: Boutique hotel near Pearl District was refinanced via Comerica Bank, locking $2.8 million at 7.0% fixed, 20-year amortization, with a 7-year balloon. Lender flexibility allowed for parking deck collateral inclusion.

Tips for Securing the Best Texas CRE Loan in 2025

1. Work with experienced, Texas-focused brokers and lenders familiar with local nuances.
2. Prepare a detailed business plan: market comps, lease structures, capital plans.
3. Maintain strong personal and business credit.
4. Organize updated property financials and legal documentation.
5. Be open to multiple lending structures—banks, credit unions, and specialty finance companies.

Frequently Asked Questions

What types of commercial properties are easiest to finance in Texas in 2025?

✅ Real Estate Investor Resources

• AirDNA (Short-Term Rental Data)
  https://www.airdna.co

• Rentometer (Rent Comps)
  https://www.rentometer.com
• Zillow Research & Data
  https://www.zillow.com/research

DSCR Loan IQ Quiz!

Test your knowledge of Debt Service Coverage Ratio (DSCR) loans!

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Page 1 of 3

What is the primary factor a lender focuses on when approving a DSCR loan for an investment property? a) The borrower's personal debt-to-income (DTI) ratio b) The property's ability to generate enough income to cover its mortgage payments c) The borrower's credit score history over the past 10 years d) The total number of investment properties the borrower already owns

Page 2 of 3

If a property has a Net Operating Income (NOI) of $5,000 per month and its total monthly debt service (PITI) is $4,000, what is its DSCR? a) 0.8x b) 1.0x c) 1.25x d) 5.0x

Page 3 of 3

Which type of borrower most commonly benefits from using a DSCR loan? a) First-time homebuyers purchasing a primary residence b) Investors with a strong W-2 income and minimal tax deductions c) Self-employed individuals or those with complex income who want to avoid traditional income verification d) Homeowners looking to refinance their primary residence for a lower interest rate

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Multifamily, stabilized industrial, and grocery-anchored retail are the most favored property types among Texas lenders.

How long does closing take?

Bank commercial mortgages typically close in 45–90 days. Quick-close programs (bridge/agency loans) can close in as little as 30 days.

Can investors from outside Texas secure property loans?

Yes, both in-state and out-of-state investors are eligible, provided they meet the lender’s underwriting criteria.

Conclusion: Unlock Texas CRE Opportunity in 2025

With robust growth across major markets and an active lending environment, Texas remains one of the best states for commercial real estate investment in 2025. By understanding the evolving commercial mortgage landscape and leveraging local lender expertise, investors can structure winning deals in Dallas, Houston, Austin, San Antonio, and beyond. Whether you’re new to CRE or scaling your portfolio, start your financing journey early and work with a proven Texas commercial mortgage professional.

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