Ground-Up Construction Financing for DFW
Capital for building it, industrial, multifamily, retail, hospitality, and mixed-use construction across the Metroplex.
- Ground-up multifamily and build-to-rent in DFW suburbs
- Industrial and flex construction in Alliance, Mesquite, Wilmer
- Build-to-suit deals with a credit tenant pre-lease
- Mixed-use construction in urban infill submarkets
Construction Loans, at a glance
- Loan size
- $1M – $250M
- Amortization
- Interest-only during construction
- Term
- 18–36 months (construction) + mini-perm options
- LTV
- Up to 70% loan-to-cost
- Rate
- SOFR + 3% to 6%
- Typical close
- 45–90 days
Construction financing is the riskiest product in the commercial lending stack, budget overruns, weather, labor shortages, and permitting delays all live on the lender's balance sheet, which is why construction loans are structured, covenant-heavy, and closed only for sponsors who can prove they can execute. The upside for the borrower is that leverage can push to 70% of cost on strong deals, and the loan funds the land, hard costs, soft costs, and an interest reserve in a single draw-based structure.
Dallas-Fort Worth has been one of the most active commercial construction markets in the country for the last decade. We routinely place construction debt on multifamily ground-ups in suburbs like Frisco, McKinney, and Mansfield; on industrial facilities in Alliance, Wilmer, and the southern DFW logistics belt; and on build-to-suit deals where a credit tenant has already executed a long-term lease. The lender pool varies dramatically by asset class, a life-company lender building a Class A office tower is a different universe from a non-bank construction lender writing a small-bay industrial deal.
How the draw process actually works
Construction loans do not fund as one lump sum. They fund over the construction period in monthly draws, with each draw supported by a pay application from the general contractor, a title down-date, lien waivers, and sometimes a third-party inspector's field report. The loan starts at zero balance (plus a possible closing advance for land) and grows with each draw, which keeps the borrower's interest carry efficient, you only pay interest on what has been drawn.
Lenders underwrite to a total project budget that includes contingency. Most construction lenders require a 5%–10% hard-cost contingency on top of the GMP contract. If the deal runs over, the borrower typically has to come out of pocket for the overage before the lender will fund the next draw.
Construction-to-perm in DFW
The cleanest structure for a long-hold sponsor is a construction loan with a built-in mini-perm or a forward take-out commitment from a permanent lender. That way the borrower locks in their exit on day one and eliminates refinance risk. We structure construction-to-perm deals on multifamily (with agency take-outs), industrial (with life companies), and single-tenant net lease (with CMBS or insurance take-outs).
When a forward commitment is not available, we underwrite the construction debt assuming the borrower will need a bridge or permanent refinance at completion. That means stress-testing the deal at higher exit rates and wider cap rates than current, a discipline that is especially important in today's rate environment.
Ready to explore Construction options?
Get a QuoteConstruction Loans, FAQ
How much down payment do I need for commercial construction in DFW?
Plan on contributing 25%–35% of the total project cost (land + hard + soft costs + contingency + interest reserve). Sponsors with strong liquidity, repeat construction experience, and a pre-leased anchor can sometimes push leverage higher. Ground-up deals with no pre-leasing in speculative submarkets will see tighter sizing.
Does the land I own count as equity?
Yes. If you already own the land, the appraised value of the land at loan origination counts toward your equity contribution. If you are contributing land at cost basis rather than current market value, expect the lender to pick the lower of the two.
Can I use a construction loan for a value-add renovation?
Yes, heavy value-add and gut rehab projects typically use a construction loan or a construction-style bridge. Light value-add (cosmetic turnovers, unit refreshes) can usually be handled by a standard bridge loan with an earn-out feature.
What is the average construction loan rate in DFW right now?
Rates on construction debt float over SOFR and vary by lender type. Bank construction loans are pricing in the SOFR + 2.5%–3.5% range for strong sponsors with pre-leasing. Debt fund construction is wider, typically SOFR + 4%–6%, but more flexible on leverage and pre-leasing requirements.
How do I exit a construction loan at completion?
The standard exit options are a permanent loan (agency for multifamily, life company or CMBS for industrial/office), a sale of the stabilized asset, or a refinance into bridge debt during a lease-up period if stabilization is not yet achieved. We advise on exit strategy during underwriting so you are not scrambling at maturity.
Other loan programs
SBA
SBA Loans
Government-guaranteed financing for owner-users buying, building, or expanding commercial property across North Texas.
- Loan size
- $150K → $15M
- Close
- 45–75 days
SBA 504
SBA 504 Loans
The only commercial loan product in the country that gives owner-occupiers a 20- or 25-year fixed rate on 40% of their purchase.
- Loan size
- $500K → $15M
- Close
- 60–90 days
SBA 7(a)
SBA 7(a) Loans
The most flexible small-business loan in the country, real estate, acquisition, equipment, and working capital in a single package.
- Loan size
- $50K → $5M
- Close
- 45–60 days with Preferred Lender
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