Houston is the fastest-growing major economy in the United States, with GDP surging 25.1% from 2021 to 2023 and a record $697 billion GDP in 2023. The metro area is forecast to reach 3.5 million jobs by the end of 2026, and commercial real estate investors are paying close attention. Whether you are looking at multifamily in The Woodlands, industrial space near the Port of Houston, or a retail center along the Energy Corridor, understanding your financing options is the first step toward closing a profitable deal.
This guide covers everything Houston commercial real estate borrowers need to know - current loan rates, available programs, submarket conditions, and step-by-step guidance on how to secure funding in Texas's largest metro.
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What Are Current Commercial Loan Rates in Houston?
As of early 2026, Houston commercial mortgage rates start as low as 5.18%, though the rate you receive depends heavily on property type, loan structure, and borrower profile. Here is a breakdown of what borrowers are seeing across major loan categories:
- Multifamily (Agency): 5.0% to 5.4% for 10-year fixed terms
- Bank Loans (Texas): 5.8% to 6.2% across multifamily and mixed-use properties
- Life Company Loans: 5.5% to 6.1% for stabilized core assets
- CMBS Loans: Averaging 6.4% with spreads of 225 to 300 basis points
- Bridge Loans: 9.0% to 12.0%, with Texas markets often 100 basis points cheaper than coastal metros
- Construction Loans: SOFR + 300 to 500 basis points, translating to roughly 7.5% to 9.0%+
Houston-specific debt terms for stabilized assets reflect the metro's strong fundamentals. Multifamily deals are closing near 6% with 65% LTV and a minimum 1.25 DSCR. Office properties, given the sector's ongoing vacancy challenges, require tighter terms - LTVs of 50% to 60% and rates above 7%. Retail sits in between at 6% to 6.5% with 65% LTV.
Use our commercial mortgage calculator to estimate monthly payments and total interest costs based on these current Houston rates.
Which Loan Programs Are Available for Houston Commercial Properties?
Houston borrowers have access to a wide range of financing programs, each suited to different deal types and borrower profiles. Here are the most common options:
SBA Loans
SBA loans remain one of the most popular financing vehicles for owner-occupied commercial properties in Houston. The SBA 504 program features a conventional fixed-rate first mortgage paired with a 20-year, fully amortized second mortgage guaranteed by the SBA. This structure allows borrowers to put as little as 10% down while locking in competitive long-term rates. SBA 7(a) loans offer more flexibility for working capital and smaller acquisitions.
Learn more about SBA loans for commercial real estate and how to structure your application for approval.
Bridge Loans
For investors who need to close quickly or are acquiring value-add properties that do not yet qualify for permanent financing, bridge loans fill the gap. Houston bridge loan rates typically range from 4.89% to 12%, with terms from 6 months to 3 years. These loans focus on property value and upside potential rather than personal financial history, covering up to 75% of the property's value.
Read our complete commercial bridge loan guide for a deeper breakdown of qualification criteria and exit strategies.
DSCR Loans
Debt Service Coverage Ratio loans have become increasingly popular among Houston rental property investors. Unlike conventional loans, DSCR programs qualify borrowers based on the property's rental income rather than personal income. This makes them ideal for investors with complex tax returns or multiple properties. Houston's strong rental market - with average multifamily rents at $1,400 per month - provides the cash flow foundation most DSCR lenders require.
Check your property's qualification using our DSCR calculator, and read our guide on DSCR loan requirements to understand minimum thresholds.
Hard Money Loans
Hard money loans are asset-based lending solutions ideal for fix-and-flip investors and developers working on shorter timelines. These loans fund in days rather than weeks, making them competitive in Houston's fast-moving investment market. Rates are higher - typically 10% to 14% - but the speed and flexibility often justify the cost for time-sensitive deals.
How Is the Houston Commercial Real Estate Market Performing in 2025?
Houston's commercial real estate market shows divergent trends across property types, creating both opportunities and risks for investors. Understanding these dynamics is critical when structuring your financing.
Office Market
Houston's office sector continues to face headwinds. Overall vacancy reached 24.8% at the close of Q4 2025, up 30 basis points from the prior quarter. However, there is a clear bifurcation: newer buildings completed in the past 15 years average just 14.7% vacancy, while older vintage buildings (pre-2009) average 27.7%. Average full-service asking rents rose to a new all-time high of $30.31 per square foot, reflecting a 2.9% year-over-year increase.
This two-tier market means financing newer, well-located office assets is still feasible, while lenders are far more cautious with older Class B and C properties.
Industrial Market
Industrial is the clear standout. Vacancy dipped to 6.0% in Q4 2025, driven by strong absorption that kept pace with new deliveries. Rental rates rose 13.4% year over year to $10.67 per square foot, hitting a new all-time high for the seventh consecutive quarter. The Port of Houston, expanded logistics networks, and manufacturing growth continue to fuel demand.
Retail Market
Retail vacancy held steady at 5.6% in Q4 2025, with average market rents at $24.35 per square foot and modest 1.8% annual rent growth. Houston's growing population and job base support continued retail absorption, particularly in suburban corridors.
Multifamily Market
Multifamily rents sit at approximately $1,400 with vacancies at 11.6%. While the vacancy figure is elevated due to recent supply additions, momentum is turning as absorption accelerates and construction starts slow. Multifamily cap rates in Houston hover around 6.5%.
Which Houston Submarkets Offer the Best Investment Opportunities?
Houston's sheer geographic size means that submarket selection can make or break a deal. Here are the key areas investors and lenders are watching:
Downtown Houston
The Central Business District commands some of Houston's highest office rents, often $28 to $40 per square foot. While overall office vacancy is elevated, Class A towers with strong tenant rosters still attract institutional capital. Downtown is also seeing mixed-use redevelopment as older office buildings convert to residential or hospitality uses.
Energy Corridor
Expanding westward with corporate campuses and mixed-use developments, the Energy Corridor benefits from Houston's deep ties to the oil, gas, and energy transition industries. Investors targeting office and flex space here should expect moderate vacancy but strong long-term fundamentals tied to energy sector corporate relocations.
The Woodlands
This master-planned community north of Houston continues to attract population growth, corporate tenants, and retail investment. Strong suburban migration trends make The Woodlands a prime submarket for multifamily, retail, and medical office investments.
Galleria/Uptown
The Galleria area remains one of Houston's premier commercial destinations, with high-end retail, Class A office space, and luxury multifamily developments. Cap rates here tend to be lower - reflecting the quality and stability of the tenant base - but competition for assets is fierce.
Katy and Cypress
Western suburban markets like Katy and Cypress are experiencing significant population growth, driving demand for retail, medical office, and build-to-rent developments. Bridgeland and other master-planned communities in this corridor are creating opportunities for ground-up commercial development.
Texas Medical Center Area
Proximity to the world's largest medical complex creates consistent demand for medical office, life sciences, and multifamily housing. Southwest Houston benefits from this anchor, and investors targeting healthcare-related real estate find strong occupancy and rent stability here.
East Houston and Port Area
North Houston, Pasadena, and Baytown are becoming logistics powerhouses supported by industrial parks and port access. Industrial investors seeking the highest yields often find them in this corridor, where cap rates of 5.5% to 7% are common depending on asset age and location.
What Are Typical Cap Rates for Houston Commercial Properties?
Cap rates in Houston generally range from 5.5% to 8%, varying significantly by property type and submarket. Here is what investors are seeing across major asset classes:
- Industrial (Prime): 5.5% to 6.0% for newer assets near major logistics corridors
- Industrial (Older/Fringe): 6.5% to 7.0%
- Multifamily: Approximately 6.5%, though Class A in top submarkets can compress to 5.5%
- Retail: 6.0% to 7.5%, depending on tenant quality and lease terms
- Office (Class A): 6.5% to 7.0% in Uptown or Downtown
- Office (Class B/C): 7.5% to 9.0%+ given elevated vacancy risk
These cap rates directly influence the loan terms you can secure. Lenders typically underwrite to a spread above the cap rate, so assets with lower cap rates in strong submarkets tend to receive more favorable financing. Understanding how these numbers interact is key to structuring a deal that pencils.
How Do You Qualify for a Commercial Loan in Houston?
The qualification process for Houston commercial loans follows a structured path, though requirements vary by program type. Here is what most lenders evaluate:
Property-Level Metrics:
- Net Operating Income (NOI) and cash flow projections
- Current and projected occupancy rates
- Property condition, age, and recent capital improvements
- Environmental and zoning compliance
Borrower-Level Metrics:
- Credit score (typically 660+ for conventional, 580+ for some bridge programs)
- Net worth and liquidity (many lenders require net worth equal to the loan amount)
- Real estate investment experience
- Personal and business tax returns (2-3 years for conventional programs)
DSCR Requirements: Most Houston lenders require a minimum DSCR of 1.20 to 1.25, meaning the property's net operating income must exceed debt service payments by 20% to 25%. Multifamily deals with strong occupancy can sometimes qualify at 1.15.
Ready to discuss your Houston commercial property financing? Contact our lending team for a personalized rate quote and program recommendation based on your specific deal.
What Is the Step-by-Step Process for Getting a Commercial Loan in Houston?
Securing commercial financing in Houston follows a predictable process, though timelines vary by loan type. Here is what to expect:
Bridge loans and hard money can close in as few as 7 to 14 days, while SBA loans typically take 60 to 90 days. Conventional bank loans and CMBS financing fall somewhere in between at 30 to 60 days.
Having your financial documentation organized before you start - including property financials, personal financial statements, entity documents, and a business plan - will significantly speed up the process regardless of which program you pursue.
Why Is Houston a Strong Market for Commercial Real Estate Investment?
Several structural advantages make Houston one of the most attractive commercial real estate markets in the country:
Economic Scale and Diversity: Houston's GDP reached a record $697 billion in 2023, making it the fastest-growing economy among the 20 most populous U.S. metros. While the energy sector remains important, Houston has diversified into healthcare, technology, aerospace, and logistics.
Population Growth: Houston led all major metros in both birth rates and net migration in 2024. This population engine fuels demand across every commercial property type - from multifamily housing to retail and medical office.
Job Creation: The Greater Houston Partnership forecasts 30,900 new jobs in 2026, with the metro expected to reach a record 3.5 million jobs by year-end. Key growth sectors include healthcare, construction, professional services, and logistics.
Business-Friendly Environment: Texas has no state income tax, relatively low regulatory burden, and a pro-business legal framework. These factors continue to attract corporate relocations and business formation.
Infrastructure Investment: Ongoing expansion of the Port of Houston, highway improvements, and transit projects support long-term property value appreciation across the metro.
Looking to capitalize on Houston's growth? Get in touch with our team to explore financing options tailored to the Houston market.
What Should Houston Borrowers Know About Loan-to-Value Requirements?
Loan-to-value ratios in Houston vary by property type and loan program. Lenders adjust LTV limits based on perceived risk, and Houston's market dynamics influence these calculations:
- Multifamily: Up to 75% to 80% LTV for stabilized properties with strong occupancy
- Industrial: Up to 70% to 75% LTV, reflecting the sector's strong performance
- Retail: Typically 65% to 70% LTV for well-leased centers
- Office: 50% to 65% LTV, with tighter limits reflecting higher vacancy risk
- Construction: 60% to 70% of completed value (loan-to-cost ratios of 75% to 85%)
- SBA 504: Up to 90% LTV for owner-occupied properties
Borrowers seeking higher leverage should consider SBA programs for owner-occupied deals or mezzanine financing to supplement a senior loan. Houston's competitive lending market means there is usually a creative solution for well-structured deals.
Frequently Asked Questions About Commercial Loans in Houston
What is the minimum down payment for a commercial loan in Houston?
Down payments typically range from 10% to 35%, depending on the loan type. SBA 504 loans offer the lowest entry point at 10% down for owner-occupied properties. Conventional bank loans generally require 20% to 25% down, while bridge and hard money loans may require 25% to 35% equity. The exact requirement depends on property type, borrower experience, and the lender's underwriting criteria.
Can I get a commercial loan in Houston with bad credit?
Yes, though your options will be more limited and rates will be higher. Bridge loans and hard money programs focus primarily on the property's value and income potential rather than personal credit scores. Some DSCR lenders will work with credit scores as low as 620. For the best rates and terms, a credit score of 680 or higher is typically needed. Read our guide on SBA loans for commercial real estate to understand government-backed options.
How long does it take to close a commercial loan in Houston?
Timelines vary significantly by loan type. Hard money and bridge loans can close in 7 to 14 days. Conventional bank loans take 30 to 60 days. SBA loans typically require 60 to 90 days due to additional government underwriting requirements. CMBS loans often take 45 to 75 days. Having complete documentation ready before applying will help you close faster regardless of program.
Are commercial loan rates in Houston lower than the national average?
Houston and broader Texas markets often see rates that are 50 to 100 basis points lower than coastal markets for comparable deal types, particularly for bridge loans. This is driven by lower property costs, strong cash flows relative to purchase prices, and a competitive lending environment with numerous regional banks and credit unions active in commercial real estate.
What types of commercial properties can I finance in Houston?
Virtually any income-producing commercial property can be financed in Houston, including multifamily apartments, office buildings, retail centers, industrial warehouses, medical office buildings, hotels, self-storage facilities, mixed-use developments, and special-purpose properties like car washes and gas stations. Each property type has specific lender requirements, and some programs are better suited to certain asset classes than others.
Do I need a local presence to get a commercial loan for Houston property?
No, many lenders that finance Houston commercial real estate work with out-of-state investors. However, having a local property management team or operating partner can strengthen your loan application, particularly for value-add and development deals. National lenders, CMBS conduits, and many bridge lenders routinely fund Houston deals for investors based elsewhere.
Take the Next Step on Your Houston Commercial Loan
Houston's combination of economic growth, population expansion, and diverse commercial real estate opportunities makes it one of the strongest markets in the country for commercial property investment. Whether you are acquiring your first rental property or refinancing a portfolio of industrial assets, having the right financing partner makes all the difference.
Contact Clear House Lending today to discuss your Houston commercial real estate financing needs. Our team specializes in matching borrowers with the right loan program - from SBA and conventional options to bridge, DSCR, and hard money solutions - so you can move forward with confidence.
Market data sourced from Cushman & Wakefield Houston MarketBeats Q4 2025, Partners Real Estate Q3 2025 Houston Office Report, Crexi Houston Market Report 2025-2026, Greater Houston Partnership Economic Outlook 2026, and Select Commercial mortgage rate data.