Houston has no citywide zoning, a huge industrial base along the Ship Channel and US 290, and some of the highest property tax and insurance lines in the country. All three shape how a commercial loan here is sized.
In short: LendingStreet finances income-producing commercial property across greater Houston, including 9+ unit apartments, mixed-use, retail, office, flex and light industrial, and self-storage. Loans are custom-termed up to $5M+, with up to 75% LTV on acquisitions, and are sized on the property's NOI, DSCR and appraised value. The property must cash flow, and your experience, liquidity, rent roll and leases all count.
Commercial, for our purposes, means income property with more than eight residential units or with commercial tenants. In Houston that covers a wide range: older garden apartments in Gulfton, Sharpstown and Alief, ground-floor retail with apartments above along Washington Avenue or in the Heights, neighborhood strip centers on Westheimer and Bellaire Boulevard, small office buildings in Westchase and the Energy Corridor, flex and light industrial off US 290 and Beltway 8, and self-storage across the suburbs.
A building with one to eight units is residential. For those, see our Houston DSCR loans, 2-4 unit loans or 5-8 unit loans, which use a different, simpler process.
| Property type | Common Houston locations | What drives sizing |
|---|---|---|
| 9+ unit multifamily | Gulfton, Sharpstown, Alief, Westchase, Midtown | Rent roll, trailing operating statements, expense ratio |
| Mixed-use | Washington Avenue, the Heights, Montrose, EaDo | Blended commercial and residential NOI |
| Retail strip | Westheimer, Bellaire Boulevard, Katy, Pearland | Lease terms, tenant mix, rollover |
| Small office | Westchase, Energy Corridor, Greenway Plaza | Occupancy and lease rollover risk |
| Flex and light industrial | US 290, Beltway 8, Ship Channel area | Tenant leases, building condition |
| Self-storage | Cypress, Katy, Pearland, Humble | Occupancy history, street rates, expenses |
Commercial loans start with net operating income: collected rent and other income, less a vacancy allowance and operating expenses such as property taxes, insurance, repairs, management and reserves. Debt service is not part of NOI.
The loan amount is the lower of two tests. The first is leverage: up to 75% of value on an acquisition, often less depending on property type and balance. The second is coverage: NOI divided by estimated annual debt service has to clear the program's DSCR minimum. In Houston the coverage test usually binds first, because taxes and insurance take such a large share of income.
This example is illustrative and not a quote. An investor buys a multi-tenant flex building in northwest Houston for $2,400,000. Scheduled rent is $268,000 a year. The underwriting assumes a 7% vacancy and credit loss, leaving $249,240 of effective income. Assumed operating expenses not reimbursed by tenants, including taxes, insurance and reserves, are $62,000, so NOI is $187,240.
At 70% LTV the loan is $1,680,000, with estimated annual debt service of about $148,981 on a 25-year amortization. DSCR is about 1.26x, which clears a typical coverage minimum with some cushion. The buyer brings $720,000 plus closing costs.
| Item | Amount |
|---|---|
| Purchase price | $2,400,000 |
| Scheduled rent | $268,000 |
| Vacancy and credit loss (7% assumption) | -$18,760 |
| Operating expenses (assumption) | -$62,000 |
| NOI | $187,240 |
| Loan at 70% LTV | $1,680,000 |
| Estimated annual debt service | $148,981 |
| DSCR | About 1.26x |
The City of Houston does not have traditional use-based zoning. That gives investors flexibility, but land use is still governed by deed restrictions, the city's development and subdivision rules, setback and parking requirements, and floodplain rules. Many neighborhoods have active deed restrictions that limit commercial use.
Suburban cities such as Sugar Land and Pearland do have zoning codes. Underwriting checks that the current use is legal under whichever rules apply, so pull the deed restrictions and any city letters early.
Hurricane Harvey in 2017 changed how Houston property is underwritten. Flood history, the FEMA flood zone and the building's elevation all affect insurance cost and sometimes whether a property is financeable at the size you want. Wind events, including Hurricane Beryl in 2024, have also pushed up premiums and deductibles.
Get a full insurance quote, including flood where required and windstorm coverage in coastal areas, during due diligence. A quote that comes in higher than the seller's current policy goes straight into lower NOI.
Texas has no state income tax, so local property taxes are high. Taxes are set by each taxing unit using values from the county appraisal district, such as the Harris Central Appraisal District, Fort Bend Central Appraisal District or Montgomery Central Appraisal District. Owners can protest the appraised value each year.
Because Texas is a non-disclosure state, sale prices are not public record. That makes comparable sales harder to find, and it means your purchase may prompt a higher appraised value the next year. Confirm the taxing units and current values with the appraisal district before you sign.
A commercial loan in Houston usually takes several weeks longer than a residential DSCR loan. The file typically needs a full commercial appraisal, a review of the rent roll and leases, an environmental report and a property-condition review. On older industrial or retail sites, environmental work can take time.
Starting with a complete package is the best way to keep the timeline short.
Send these with your request so the team can size the loan quickly.
Our investor loans are business-purpose loans on non-owner-occupied property. We do not finance a building your own business will occupy.
Use the form below or call (877) 298-1001 with the address, price, rent roll and target loan amount. The team will run NOI and DSCR on realistic tax and insurance figures and come back with custom terms or tell you plainly what would need to change.
Income property such as 9+ unit apartments, mixed-use, retail, office, flex and light industrial, and self-storage. Buildings with one to eight units go through our residential DSCR programs.
Terms are custom and loans go up to $5M+. Small-balance programs generally cover roughly $500K to $5M. The final amount is the lower of the leverage test and the DSCR test.
Up to 75% LTV on acquisitions. Maximum leverage varies by property type, balance and program, and the DSCR test often lowers it.
Neither by itself. Underwriting still checks deed restrictions, development rules and floodplain rules to confirm the current use is legal.
Mostly through insurance cost and NOI. A property in a mapped flood zone or with prior flood losses can carry a much higher premium, which reduces the loan the income can support.
Recourse varies by program. Most borrowers close in an LLC or other entity, and the terms are spelled out in your quote.
No. Our commercial loans are for investors leasing to third-party tenants, not for a business's own space.
Longer than a residential loan. Plan for several weeks for the appraisal, lease review, environmental and property-condition work. A complete file shortens the process.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
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