The Houston Feasibility Market: SBA, USDA and Its Structural Variables

Data as of June 2026. This companion research post carries the full structural and capital-markets detail behind the Houston feasibility study hub. Every figure traces to a primary source named in the Sources list. MMCG's city briefs use primary and FOIA sources and do not carry commercial rent, vacancy or occupancy figures.

Houston carries its own set of statute and government rooted variables that redefine the underwriting envelope for a commercial real estate, SBA or USDA feasibility study. Each is stated here at the level a primary source supports.

No conventional zoning (deed restrictions and Chapter 42). Because Houston has no zoning, an underwriter cannot rely on a use classification or an as-of-right entitlement to prove a project's use is permitted or protected from an incompatible neighbor. Land development instead runs through Chapter 42 (subdivision and platting), citywide standards for lot size, setbacks, parking and access, and privately recorded deed restrictions that the City is authorized to help enforce. Feasibility therefore turns on the deed-restriction and plat status of the specific parcel and on adjacent-use risk, not on a zoning map, which a national template silently assumes exists.

The ERCOT grid and the Texas Interconnection. ERCOT manages about 90 percent of Texas electric load and, unlike most metros that sit inside the vertically regulated Eastern or Western Interconnection, has few connections to grids outside the state, so it cannot readily import power during a shortfall, as Winter Storm Uri exposed in 2021. For underwriting this means electricity is a market-priced, volatile operating expense rather than a stable regulated tariff, and it adds reliability and business-interruption risk that a national template, which assumes a regulated interconnected utility, does not price in.

The Chapter 19 floodplain regime (post-Harvey 500-year elevation). After Hurricane Harvey, Houston amended Chapter 19 (effective September 1, 2018) to define the regulated Houston special flood hazard area by the 0.2 percent (500-year) flood rather than the 1 percent base flood, and to set the minimum flood protection elevation at the 0.2 percent flood elevation plus 2 feet (3 feet for critical facilities). New construction and substantial improvements must elevate the lowest floor and all utilities to that level. This raises pad, fill, foundation and design costs, constrains site coverage through fill-mitigation rules, and drives flood-insurance and reserve assumptions well beyond a national template keyed to the 100-year map.

The Port of Houston and the Ship Channel energy base. Port Houston reports the Port of Houston as the first-ranked U.S. port in foreign waterborne tonnage (220.1 million short tons in 2024) and the nation's largest port for waterborne tonnage, while the Federal Reserve Bank of Dallas calls Houston the energy capital of the U.S. This concentrates demand for industrial, warehouse, logistics and office space in oil, gas, refining, petrochemicals and trade. Underwriting must weight cyclicality tied to energy prices and global trade, plus the tenant-industry and counterparty concentration that a geographically and sectorally diversified national template does not assume.

Ad valorem property tax regime with no state income tax. Texas has no state property tax; property tax is set and collected by local taxing units (county, city, school district and special districts) and, per the Comptroller, is the largest single funding source for community services. Taxing units must generally tax all property at its current market value, and appraisal districts revalue annually. For underwriting this means the single largest operating expense reprices with market value and with each jurisdiction's rate stack, so pro formas must model reassessment on sale, protest outcomes and overlapping-district rates rather than the flat, income-tax-offset assumptions of a national template.

Nationally, the U.S. Small Business Administration closed fiscal year 2025 having guaranteed 84,400 7(a) and 504 loans for $44.8 billion, comprising 77,600 7(a) loans for $37 billion and 6,750 504 loans for $7.8 billion, per SBA News Release 25-83 dated September 30, 2025. The Houston metro cut below is computed in-house from the SBA 7(a) and 504 FOIA release by county membership across the Houston-Pasadena-The Woodlands, TX Metropolitan Statistical Area, never read from an SBA district total.

In fiscal year 2025 the Houston metro recorded 1,685 7(a) approvals for $1,042,411,600 and 101 504 approvals for $168,357,000, filed largely through the HOUSTON DISTRICT OFFICE. The most active 7(a) lenders in the metro that year, by approval count, were Zions Bank (164 loans); Northeast Bank (163 loans); Newtek Bank, National Association (145 loans); The Huntington National Bank (131 loans); Readycap Lending, LLC (72 loans); JPMorgan Chase Bank, National Association (64 loans); Wells Fargo Bank National Association (61 loans); Lendistry SBLC, LLC (53 loans). The most active 504 Certified Development Companies were Capital Certified Development Corporation (30 loans, $52,047,000); North Texas Certified Development Corporation (18 loans, $24,830,000); Community Certified Development Corporation (17 loans, $28,718,000); LiftFund, Inc. (12 loans, $19,793,000); Lone Star State Capital Corporation (6 loans, $7,905,000); Greater East Texas Certified Development Company (5 loans, $12,508,000).

USDA business and community-facility guaranteed loan programs run under 7 CFR Part 5001, requiring a rural location, defined at 7 CFR 5001.3 as any area not in a city or town of more than 50,000 inhabitants and not in the urbanized area contiguous and adjacent to such a city or town, using the latest decennial census. In the Houston metro this excludes Houston and its continuous suburbs but can reach small incorporated towns in the outer counties (Waller, Austin, Chambers, Liberty, Brazoria and outer Fort Bend); MMCG verifies eligibility at the subject address on the USDA eligibility map at intake.

A Houston market piece would ordinarily carry submarket rents, vacancy and absorption. Those come from commercial market reports, which MMCG's city briefs do not carry, so they are omitted rather than shown on a weaker source. What remains is the statute, the federal program frame and the SBA record computed from the primary file, which is the part of a Houston study a lender can check.