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

Investing in Texas commercial real estate in 2025 remains a lucrative opportunity, with diverse sectors ranging from bustling urban developments in Dallas and Houston to rapid growth corridors in Austin, San Antonio, and beyond. Successful investors understand that securing the right commercial real estate loans is a cornerstone of profitable transactions. This comprehensive guide will help you navigate commercial mortgages, local lenders, application processes, top commercial districts, and current market developments.

2025 Texas Commercial Real Estate Market Overview

• Dallas-Fort Worth Metroplex: Notable for continued expansion in both office and industrial sectors, especially around Uptown Dallas and AllianceTexas.
• Houston Energy Corridor & Downtown: Attracting investment in mixed-use developments and adaptive reuse projects.
• Austin Central Business District: Tech-driven growth with high demand for Class A office space and multifamily projects.
• San Antonio Riverwalk & Medical Center: Strong hospitality, healthcare, and multifamily segments.
• Plano’s Legacy West: Corporate headquarters driving demand for office and retail properties.
• Fort Worth Stockyards: Ongoing revitalization, fostering opportunities in hospitality and entertainment spaces.
• Arlington Entertainment District: Tourism and mixed-use investments remain robust.

Popular Commercial Real Estate Loan Options in Texas

Texas offers investors a broad array of commercial real estate loans to meet a variety of asset types and investment strategies. In this guide, we focus on commercial mortgages—the backbone of acquisition and refinance financing for stabilized income-producing properties.

What is a Commercial Mortgage?

A commercial mortgage is a loan secured by income-producing property, such as office buildings, shopping centers, industrial warehouses, or multifamily complexes (typically with 5+ units). These loans often range from $500,000 to $100 million+, depending on the asset and borrower profile.

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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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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Types of Properties Financed:

• Office buildings & medical offices
• Retail shopping centers & standalone retail
• Industrial warehouses & distribution centers
• Multifamily apartment complexes (5+ units)
• Hotels, hospitality, and mixed-use developments
• Special purpose properties (self-storage, senior housing, etc.)

Top Commercial Real Estate Lenders in Texas (2025)

Securing the best terms starts with working with reputable lenders. Here are notable commercial lenders serving Texas:

1. Texas Capital Bank – Local expertise in multifamily, office, and industrial assets across Dallas, Houston, and Austin.
2. Frost Bank – Full-service commercial mortgage lending with competitive rates for CRE investors statewide.
3. Amegy Bank – Known for relationship-driven lending and deep ties across Texas’ major commercial corridors.
4. BBVA USA (now PNC) – Providing a suite of commercial products for acquisition, construction, and refinance.
5. JLL Capital Markets – National reach with a major presence in Texas, offering access to life company, CMBS, and agency executions.
6. Veritex Community Bank – Specializes in middle-market commercial loans for retail, office, and multifamily.

Current Texas CRE Loan Terms & Rates (2025)

• Loan Amounts: $500,000 to $50 million+ for stabilized properties
• Interest Rates: 6.00% – 7.75% (fixed, variable available)
• Amortization: 20–30 years, often with 5–10 year maturity
• Loan-to-Value (LTV): Up to 75% (typically 65–70% for most assets)
• Debt Service Coverage Ratio (DSCR): 1.25x minimum for most property types
• Recourse: Recourse and non-recourse options available, depending on strength of sponsorship and asset

Step-by-Step Process: How to Get a Commercial Mortgage in Texas

1. Define Your Investment Plan: Identify the property type, location (such as Dallas’ Uptown or Houston’s Galleria), loan amount, and intended use.
2. Select a Lender: Research Texas-based lenders (see list above) who match your financing needs.
3. Pre-Qualify: Submit basic financials and property information for initial feedback.
4. Prepare the Loan Package: Complete personal and business financial statements, property rent roll, operating history, purchase agreement, and business plan.
5. Submit Formal Application: Lender performs credit checks, reviews documentation, and engages third-party reports (appraisal, environmental, property condition).
6. Underwriting & Approval: Underwriters analyze property cash flow, borrower experience, and market conditions.
7. Loan Commitment & Due Diligence: Receive a term sheet; negotiate terms. Lender completes final due diligence.
8. Closing: Execute loan documents, fund the transaction, and officially acquire or refinance the property.

Texas Market Considerations in 2025

Texas’ job growth, population influx, and favorable business climate continue to fuel property demand. Investors should be mindful of:

• Rising construction and insurance costs: Affecting both new and existing properties.
• Interest rate volatility: Lock rates early for stable cash flow projections.
• Zoning and local incentives: Explore tax abatements and Opportunity Zone programs in targeted districts.

Success Stories: Texas CRE Loan Closings in 2025

• Legacy West Office, Plano: $5.2M acquisition mortgage for a stabilized Class A office tower. Fixed rate at 6.15%, 10-year term, 25-year amortization.
• Houston Galleria Retail Center: $2.8M refinance through Texas Capital Bank, reducing rate by 85 basis points with cash-out for property upgrades.
• San Antonio Multifamily (Medical Center): $3.6M loan for garden-style apartments. 70% LTV, 7.0% fixed, 30-year amortization, closed in 54 days.
• Fort Worth Light Industrial: $1.1M refinance for light warehouse space. Veritex Community Bank provided swift approval and flexible prepayment terms.
• Austin CBD Mixed-Use: $4.8M stabilized loan for a mixed-use student housing and retail property. Non-recourse, 10-year fixed, 1.30x DSCR.

Frequently Asked Questions (FAQ)

What credit score is required for Texas commercial mortgage loans?

Most lenders require a minimum FICO of 660-680+, with higher scores preferred for non-recourse loans.

How long does it take to close a commercial mortgage in Texas?

Most closings take 45-75 days, depending on property type and lender. Pre-approvals can shorten this timeline.

Are non-recourse options available for Texas CRE loans?

Yes, especially on stabilized properties in primary markets, strong sponsors, and low leverage transactions.

Can I use rental income to qualify?

Yes. Lenders focus heavily on existing or projected property cash flow (NOI) to size loan amounts.

Final Thoughts: Winning in Texas Commercial Property Investment 2025

✅ 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%

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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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In 2025, competition among Texas commercial real estate investors remains high, but attractive opportunities abound for those prepared. Partnering with a skilled lender, preparing a thorough application, and targeting Texas’s top commercial districts can yield superior returns—especially with a financing structure tailored to your investment.

✅ 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

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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

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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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Ready to take the next step? Start by contacting a proven Texas lender and assembling your commercial mortgage application today!

GHC Funding DSCR LOAN, SBA LOAN, BRIDGE LOAN

Contact GHC Funding Today. Main: 833-572-4327 Email: sales@ghcfunding.com

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