Navigating Construction Loans for Commercial Real Estate in Dallas–Fort Worth
Terrydale Capital
Nov 7, 2025 7 Min read
Building in One of the Fastest-Growing Metros in the U.S.
Dallas–Fort Worth is booming.
It’s now one of the busiest construction markets in the country. That’s thanks to a mix of rapid population growth, a low cost of doing business, and a flood of corporate relocations. As new companies move in, the demand for commercial space keeps climbing — from multifamily housing and industrial warehouses to mixed-use and retail developments.
But none of that happens without the right financing.
If you're a developer or investor, understanding how a construction loan for commercial real estate in Dallas–Fort Worth works is key. In this guide, we’ll break down what these loans are, what lenders expect, and how DFW’s unique market factors into loan terms.
What Is a Commercial Construction Loan?
A commercial construction loan provides short-term funding to build or significantly renovate income-producing properties. Unlike a traditional mortgage, this loan is disbursed in stages — known as draws — tied to construction milestones.
Most loans are interest-only during construction, and then refinanced into permanent debt once the project stabilizes. Terms generally run 12 to 36 months, with loan-to-cost (LTC) ratios up to 75–80%, depending on the borrower’s experience and project type.
Why Dallas–Fort Worth Stands Out in Construction Lending
DFW offers an edge most markets can’t match. It’s not just big — it’s fast-moving, pro-growth, and well-capitalized.
Here’s why lenders are bullish on construction loans in North Texas:
Population growth: DFW adds over 100,000 residents a year, creating demand for housing, retail, and infrastructure.
Economic diversity: Strong performance across tech, logistics, energy, and healthcare keeps the local economy resilient.
Business-friendly cities: Local governments are known for streamlined approvals and development incentives.
High investor confidence: DFW consistently ranks among the top U.S. metros for commercial real estate investment, per CBRE’s 2025 survey.
That combination means lenders are more willing to offer favorable terms — if the deal makes sense on paper.
What DFW Lenders Look For
While every lender has a slightly different checklist, most look at five key areas when evaluating DFW commercial construction loans:
Experience: Developers with a successful track record in Texas often get better terms.
Entitlements: Fully permitted land with clear title lowers risk.
Project budget: Lenders want detailed pro formas and reputable contractors.
Exit plan: A strong refinance or sale strategy is a must.
Submarket data: Rents, comps, absorption rates — the local numbers have to support your projections.
Construction Loan Terms in the Dallas–Fort Worth Market (Late 2025)
Rates and terms vary, but here’s what most developers are seeing in the current market:
Interest Rates: 7% to 10%
Loan-to-Cost: 70–80%
Term: 18 to 36 months
Recourse: Often required for smaller deals; non-recourse possible for institutional sponsors
Disbursements: Monthly or milestone-based draws
Bridge loans and mezzanine financing are also common for developers needing fast closings or layered capital stacks.
Local Challenges DFW Developers Should Know
Even in a hot market like DFW, there are hurdles:
Land prices are rising fast, especially in Frisco, McKinney, and Arlington.
Labor and materials continue to drive up construction costs.
Interest rate swings can disrupt refinance strategies.
Zoning differences vary widely between cities and counties — what works in Plano might not in Fort Worth.
These risks can be managed. But only if you plan ahead — and work with capital advisors who understand the terrain.
Choosing the Right Construction Lender in DFW
Not all lenders are equal.
When sourcing a construction loan for commercial real estate in Dallas–Fort Worth, consider:
Local market knowledge: Lenders who know the submarket can speed up approvals and underwriting.
Program fit: Some lenders focus on ground-up development, others on value-add or owner-occupied builds.
Reputation and service: Clear communication, fast draw processing, and deal execution are just as important as rates.
Terrydale Capital connects borrowers with a national network of construction, bridge, SBA, and permanent lenders. We help clients compare options, optimize structures, and get to closing — on time and on budget.
Smart Construction Financing in DFW
A solid construction loan is more than just capital — it’s the launchpad for your project’s success.
Whether you’re building a Class A multifamily complex in Frisco or a distribution center in Grand Prairie, the right financing makes all the difference. And with Dallas–Fort Worth’s continued growth, now’s the time to position yourself for long-term value.
Ready to explore competitive construction loans in DFW? Connect with Terrydale Capital to get started.
Partner With Terrydale Capital for Your Debt Financing Needs
When it comes to debt financing, understanding the right timing, process, and options is crucial. At Terrydale Capital, we provide a comprehensive range of commercial loan solutions tailored to meet your business's unique needs.
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Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
