How to Refinance a Commercial Property in Texas: Step-by-Step

Refinancing a commercial property in Texas is not like refinancing a house. There are more parties involved, more third-party reports, more negotiation on terms, and more ways to leave money on the table if the process is not managed well. If your commercial loan in DFW is coming up on maturity or you are thinking about pulling cash out of a stabilized asset, here is the end-to-end process we walk clients through every week. If your loan is one of the many coming due in the next 18 months, read our breakdown of the $1.5 trillion CRE maturity wall and what it means for DFW borrowers alongside this walkthrough.

Step 1: Decide what you actually want from the refinance

Before you talk to any lender, get clear on the goal. A rate-and-term refinance (lower payment, no cash out) is a different conversation than a cash-out refinance (pulling equity for another acquisition or returning capital to investors). The target structure (fixed versus floating, term length, recourse versus non-recourse, prepayment flexibility) should be settled in your own head before you start shopping for term sheets. This is the step most borrowers skip, and it is the reason so many commercial refinance files waste three weeks on the wrong lender pool.

Step 2: Gather the underwriting package

Every commercial lender in Texas will want roughly the same starter package. Trailing 12 and trailing 24 operating statements. Current rent roll. Three years of property tax and insurance history. A schedule of any recent capital expenditures. Borrower financial statements and two years of personal and entity tax returns. A sponsor resume or track record summary. Having all of this in a clean folder before you order term sheets saves two to three weeks on the back end of the closing.

Step 3: Match the deal to the right lender pool

The wrong lender wastes everyone's time. For stabilized DFW multifamily, the right answer is almost always agency. Fannie DUS on larger deals, Freddie Optigo or SBL on smaller, HUD 223(f) for long-hold sponsors willing to trade a 6-month closing for the cheapest capital available. For stabilized industrial in Alliance, the southern Dallas corridor, or the Mid-Cities, life insurance companies are usually the best execution. For retail and office, CMBS is the workhorse. For anything that is not stabilized yet, the answer is bridge, not permanent.

Step 4: Run multiple term sheets and compare them apples-to-apples

Term sheets arrive in different formats from different lenders, and comparing them requires normalizing the variables. We lay every quote on a single spreadsheet with the same columns: loan amount, rate, index, spread, term, amortization, LTV, DSCR, debt yield, origination fee, prepayment structure, recourse, interest reserve requirements, and estimated closing costs. Only then does the actually best deal become obvious. On a $10M DFW multifamily refinance, the spread between the best and worst agency quotes is often 15 to 25 basis points, which adds up to $150,000 to $250,000 over the life of the loan. Our Q2 2026 rate guide shows the current index levels and spread ranges for every major product so you can sanity-check quotes before signing.

Step 5: Calculate the real all-in cost of refinancing

The rate on the new loan is only part of the cost equation. The prepayment penalty on the existing loan can be substantial, especially for CMBS loans that use defeasance or yield maintenance, and for newer agency loans in the first half of their term. Third-party reports (appraisal, environmental, property condition) run $15,000 to $40,000 depending on asset size. Lender legal typically runs $20,000 to $60,000 on an agency or CMBS deal. Title, survey, recording, and lender origination add another 0.5 to 1 percent. Plan on 1.5 to 2.5 percent of the loan amount in total closing costs.

The math on whether to refinance early or wait out the prepayment window depends on the spread between the existing rate and the new rate, the remaining term on the prepay penalty, and how long you plan to hold the asset. We run that calculation for every client before recommending a refinance timeline.

Step 6: Execute the term sheet and close the loan

Once you select a lender and sign the term sheet, the closing process typically takes 45 to 90 days depending on the product. Agency multifamily is the fastest, usually 45 to 60 days with an experienced DUS or Optigo lender. CMBS runs 60 to 90 days because of the secondary-market B-piece buyer review. Life-company debt takes 60 to 90 days with heavy lender legal. HUD 223(f) is the outlier at 6 to 9 months. The fastest way to blow a closing timeline is slow document production on the borrower side, which is why we pre-collect the entire underwriting file before we even order term sheets.

What is the difference between rate-and-term and cash-out refinance?

A rate-and-term refinance replaces the existing loan with a new one at a different rate, term, or both, without pulling any equity out. It is the easier execution because the lender is not giving you additional proceeds. A cash-out refinance replaces the existing loan and returns equity to the sponsor. Cash-out is heavily used on DFW value-add multifamily after the business plan is done. You execute the renovation, rents grow, NOI rises, and the refinance pulls out your original equity (and sometimes more), leaving you with a stabilized asset and dry powder for the next deal. Cash-out LTVs typically cap at 75 to 80 percent of the new appraised value.

How much can I cash out on a DFW commercial property refinance?

Up to 75 to 80 percent LTV on stabilized assets, subject to DSCR and debt yield limits. The exact number depends on the asset class, the lender, and the sponsor. A two-year-old Class A multifamily in Frisco or Plano will get higher cash-out proceeds than an older strip center in a secondary submarket. The general rule: the tighter the underwriting metrics look on paper, the more cash you can pull out.

How long does a commercial refinance take to close in Texas?

Rate-and-term on a clean file: 45 to 75 days. Cash-out refinance: 60 to 90 days because of the extra scrutiny on trailing operating history and use of proceeds. Bank refinance with an existing relationship can go faster than agency or CMBS. HUD is always the slowest. These are realistic ranges, not marketing numbers, based on deals we have closed in the last 18 months.