Bridge Loans
Fast, short-term financing for real estate investors needing quick acquisition funds. Close in as little as 5 days with flexible terms and asset-based underwriting.
Bridge Loans: Fast, Short-Term Financing for Real Estate Investors
Bridge loans provide real estate investors with quick access to capital for property acquisition, renovation, or portfolio expansion when traditional financing timelines don't meet their needs.
This specialized program recognizes that successful real estate investing often requires speed and flexibility that conventional mortgages cannot provide. Whether you're pursuing a fix-and-flip opportunity, expanding your portfolio, or need to act quickly in a competitive market, bridge loans offer the rapid funding and flexible terms investors need.
For real estate investors, fix-and-flip entrepreneurs, and portfolio builders who need to move fast on opportunities, bridge loans provide the capital and flexibility to capture value that might otherwise be missed.
What is a Bridge Loan?
- Definition
- A bridge loan is a short-term financing solution that provides real estate investors with quick access to capital for property acquisition, renovation, or portfolio expansion. These loans typically have terms of 6 months minimum and focus on asset-based underwriting rather than traditional income verification.
- How it works
- Bridge loans enable investors to close in as little as 5 days—much faster than traditional loans which can take 30-60 days. They offer flexible payment structures including interest-only payments or deferred payments depending on the loan structure.
- Key advantage
- Bridge loans focus on asset-based underwriting, prioritizing property value and equity over traditional credit and income requirements. This makes them ideal for investors who need speed and flexibility to capture time-sensitive opportunities.
Bridge Loan Eligibility Requirements
You may be eligible for a bridge loan if you meet these key requirements:
| Requirement | Details |
|---|---|
| Credit score | 620 FICO score minimum |
| Equity requirement | 20% minimum in the property |
| Loan terms | 6 months minimum |
| Property type | Investment properties and fix-and-flip projects |
| LTV maximum | 80% for residential, 75% for commercial |
| Reserves | 6 months of payments |
| Underwriting | Asset-based, minimal income verification |
| Exit strategy | Clear plan for repayment required |
Did you know: Bridge loans can close in as little as 5 days.
Why Bridge Loans Instead of Traditional Financing?
Traditional banks often don't offer programs designed for real estate investors who need speed and flexibility. They rely on standard documentation and underwriting processes that can take weeks or months, which doesn't work when you need to act quickly on time-sensitive opportunities.
Your first bank just doesn't offer the right program for you.
Think of it like when a customer asks for something your business doesn't offer. Maybe they want delivery but you only do pickup, or they need a service you don't provide. You're not saying no because there's anything wrong with them—you just don't offer that particular service. Same with mortgages. Traditional banks work great for most people, but they don't offer the programs that real estate investors need for quick acquisitions.
Bridge loans are perfect for real estate investors who need rapid funding for fix-and-flip projects, want to expand their portfolio quickly, need to act on time-sensitive opportunities, or require flexible financing terms that traditional lenders cannot provide.
This isn't about finding loopholes or gaming the system. It's about working with lenders who understand how real estate investing actually works. Bridge loans are offered by lenders who work with investors every day. They look at the property's value and your equity position—the assets that actually matter for short-term financing—rather than your personal financial situation.
For a no obligation conversation about your mortgage, contact Chad Ellis (#2577725) of Rain City Capital at 469-249-3415.
Example Use Cases and Scenarios
Fix-and-Flip Entrepreneur
Maria used a bridge loan to quickly acquire and renovate a distressed property, then sold it for profit within 12 months.
Portfolio Expansion
Ken secured a 12-month bridge loan using equity in his current property to expand his rental portfolio before refinancing.
Opportunistic Buyer
Olivia used a bridge loan to make a competitive, non-contingent offer on a fast-moving investment property.
Value-Add Strategy
An investor used bridge financing to acquire a property for renovation and rental stabilization.
| Scenario | Description |
|---|---|
| Fix-and-Flip Entrepreneur | Maria used a bridge loan to quickly acquire and renovate a distressed property, then sold it for profit within 12 months. |
| Portfolio Expansion | Ken secured a 12-month bridge loan using equity in his current property to expand his rental portfolio before refinancing. |
| Opportunistic Buyer | Olivia used a bridge loan to make a competitive, non-contingent offer on a fast-moving investment property. |
| Value-Add Strategy | An investor used bridge financing to acquire a property for renovation and rental stabilization. |
Did you know: Bridge loans can fund up to 80% of property value for qualified investors.
How Bridge Loans Work
Bridge loans follow a specialized mortgage process designed specifically for investors who need speed and flexibility. The key differences are funding speed and underwriting approach—these loans focus on asset-based evaluation and rapid processing instead of traditional income verification.
The Bridge Loan Process
- 1. Property Analysis & Equity Assessment
- The process begins with property analysis where lenders examine the property's current value and marketability, followed by equity assessment to determine your available collateral. Lenders then calculate the maximum loan amount based on LTV ratios (75-80% for residential, 65-75% for commercial), ensuring the property provides sufficient security for the short-term loan. This analysis determines your loan eligibility based on asset value rather than income.
- 2. Exit Strategy Review
- Unlike conventional loans, bridge loan underwriting focuses heavily on your exit strategy. This includes reviewing your plan for repaying the loan through property sale, refinance, or permanent financing, property appraisal to validate current market value, title search to ensure clear property ownership, and investment plan documentation including renovation timelines and market analysis. The underwriting process prioritizes your ability to repay the loan within the short term.
- 3. Asset-Based Underwriting
- Experienced underwriters review your investment profile using asset-focused analysis instead of traditional income verification. They assess the property's value through appraisal and market comparisons, your equity position through property analysis and market conditions, and investment viability through exit strategy evaluation and market timing. The underwriting process includes the same risk assessment as conventional loans, just with a focus on asset value and exit strategy.
- 4. Rapid Approval & Closing
- Once approved, the closing process is streamlined for speed while maintaining all necessary consumer protections. You'll sign the same documents including promissory note, deed of trust, and closing disclosure, pay the same types of fees such as origination, appraisal, and title insurance, and receive the same level of consumer protection. The loan terms, interest rates, and repayment structure follow standard mortgage industry practices for short-term investment financing.
Bridge Loans vs Conventional Mortgages
Understanding the key differences between bridge loans and conventional mortgages can help you choose the right financing option for your situation.
| Feature | Bridge Loans | Conventional Loan |
|---|---|---|
| Who Qualifies | Real estate investors, fix-and-flip entrepreneurs, portfolio builders, opportunistic buyers, and anyone needing fast, short-term financing for property acquisition | W-2 employees, salaried workers |
| Income Documentation | Asset-based underwriting focusing on property value and equity, minimal traditional income verification required | W-2s, pay stubs, tax returns |
| Minimum Credit Score | 620 FICO score | 620 |
| Minimum Down Payment | 20% equity minimum | 3% |
| Private Mortgage Insurance | Not applicable | Private mortgage insurance (PMI) |
| Occupancy Type | Investment properties and fix-and-flip projects | Primary residences, second homes, investment properties |
| Property Type | Single-family, multi-family, commercial properties, distressed properties, renovation projects | Single-family homes, condos, townhouses, 2-4 unit properties |
| Interest Rates | Higher than traditional rates due to risk | Market rates |
| Processing Time | 5 days | 30-45 days |
| Closing Costs | Origination fees, appraisal fees, closing costs, potential exit fees | 2-5% of loan amount |
| Prepayment Penalty | Varies by lender | None |
| Reserves Required | 6 months of payments | 2-6 months of PITI |
| Debt-to-Income Ratio | Not considered | Up to 43% |
| Maximum Loan Amount | 80% LTV maximum | $806,500 |
| Appraisal Requirements | Property appraisal required for value determination | Standard appraisal required |
| Occupancy Requirements | Investment properties only | Primary residence for 12 months |
| Non-Warrantable Condos | Eligible with additional requirements | Not eligible |
| Manufactured Homes | Eligible if on permanent foundation | Eligible if on permanent foundation |
| ADU Properties | Eligible as investment property | Not eligible |
| Barndominiums | Eligible with proper appraisal and insurance | Not eligible |
| Tiny Homes | Eligible if meets minimum square footage requirements | Not eligible |
| Mixed-Use Properties | Eligible for residential portion | Not eligible |
| Rural Properties | Eligible | Eligible |
| Feature | Bridge Loans | Conventional Loan |
|---|---|---|
| Who Qualifies | Real estate investors, fix-and-flip entrepreneurs, portfolio builders, opportunistic buyers, and anyone needing fast, short-term financing for property acquisition | W-2 employees, salaried workers |
| Income Documentation | Asset-based underwriting focusing on property value and equity, minimal traditional income verification required | W-2s, pay stubs, tax returns |
| Minimum Credit Score | 620 FICO score | 620 |
| Minimum Down Payment | 20% equity minimum | 3% |
| Private Mortgage Insurance | Not applicable | Private mortgage insurance (PMI) |
| Occupancy Type | Investment properties and fix-and-flip projects | Primary residences, second homes, investment properties |
| Property Type | Single-family, multi-family, commercial properties, distressed properties, renovation projects | Single-family homes, condos, townhouses, 2-4 unit properties |
| Interest Rates | Higher than traditional rates due to risk | Market rates |
| Processing Time | 5 days | 30-45 days |
| Closing Costs | Origination fees, appraisal fees, closing costs, potential exit fees | 2-5% of loan amount |
| Prepayment Penalty | Varies by lender | None |
| Reserves Required | 6 months of payments | 2-6 months of PITI |
| Debt-to-Income Ratio | Not considered | Up to 43% |
| Maximum Loan Amount | 80% LTV maximum | $806,500 |
| Appraisal Requirements | Property appraisal required for value determination | Standard appraisal required |
| Occupancy Requirements | Investment properties only | Primary residence for 12 months |
| Non-Warrantable Condos | Eligible with additional requirements | Not eligible |
| Manufactured Homes | Eligible if on permanent foundation | Eligible if on permanent foundation |
| ADU Properties | Eligible as investment property | Not eligible |
| Barndominiums | Eligible with proper appraisal and insurance | Not eligible |
| Tiny Homes | Eligible if meets minimum square footage requirements | Not eligible |
| Mixed-Use Properties | Eligible for residential portion | Not eligible |
| Rural Properties | Eligible | Eligible |
Real-World Example: Bridge Loans
The Fix-and-Flip Entrepreneur's Success Story
Maria, a seasoned real estate investor, had built a successful track record of identifying and renovating distressed properties for profit. Her latest opportunity was a charming 3-bedroom house in an up-and-coming neighborhood that was listed significantly below market value due to its distressed condition. The property had strong potential but required immediate action to secure the deal.
When Maria approached her traditional bank for financing, she faced a familiar challenge. Despite having excellent credit at 720 and substantial assets, the conventional loan process would take 45-60 days—far too long for this time-sensitive opportunity. The property was already generating multiple offers, and Maria needed to act quickly to secure the deal.
Frustrated but determined to capture this opportunity, she discovered bridge loans through another lender. This specialized program would evaluate the property's value and her equity position instead of her personal income, and could close in as little as 10 days. By analyzing the property's current market value of $350,000 against her available equity, the lender calculated she could qualify for a $280,000 bridge loan at 80% LTV.
The process was streamlined: she provided property information, market analysis, and a clear exit strategy showing how she would renovate and sell the property within 12 months. No traditional income verification was required since the loan was based entirely on asset value and equity. She received approval and was able to close on the property quickly.
Over the next 8 months, Maria completed the renovations and sold the property for $485,000, generating a substantial profit after repaying the bridge loan. This story illustrates how bridge loans can enable investors to capture time-sensitive opportunities that traditional financing cannot accommodate.
Did you know: Bridge loans offer flexible payment structures including interest-only payments or deferred payments.
Benefits & Considerations
Bridge loans offer significant advantages for real estate investors who need speed and flexibility, but they also come with important considerations to weigh.
Key Benefits: Rapid funding, flexible terms, asset-based underwriting, competitive advantage
- Rapid funding
- Close in 5-15 days compared to 30-60 days for traditional loans. This speed enables you to act quickly on time-sensitive opportunities.
- Flexible terms
- 6-24 month terms with options for interest-only payments or deferred payments depending on your cash flow needs.
- Asset-based underwriting
- Focus on property value and equity rather than traditional income verification, making approval faster and more straightforward.
- Competitive advantage
- Make non-contingent, competitive offers—sometimes even "all-cash" offers—by leveraging existing property equity for immediate acquisition capital.
- High leverage
- Up to 80% LTV for residential properties and 75% for commercial properties, maximizing your purchasing power.
- Value-add support
- Particularly useful for fix-and-flip, renovation, rental stabilization, or gap-financing scenarios where time-sensitive capital is essential.
Important Considerations: Higher costs, short terms, exit strategy requirements, market risk
- Higher costs
- Interest rates are typically higher than traditional mortgage rates due to the short-term, specialized nature of the program and the higher risk involved.
- Short terms
- 6-24 month terms require you to have a solid exit strategy in place, as you'll need to repay or refinance the loan quickly.
- Exit strategy requirements
- Lenders require clear plans for repaying the bridge loan, whether through property sale, refinance, or permanent financing.
- Market risk
- Bridge loans are inherently riskier due to their short duration. Market fluctuations or delays in your exit strategy can expose you to default risk.
- Equity requirements
- Minimum 20-25% equity required, which may be higher than some conventional investment loan options.
- Reserve requirements
- 6-12 months of payment reserves typically required to ensure you can cover payments while executing your exit strategy.
For a no obligation conversation about your mortgage, contact Chad Ellis (#2577725) of Rain City Capital at 469-249-3415.
Frequently Asked Questions About Bridge Loans
Get answers to the most common questions about bridge loans. Whether you're wondering about qualification requirements, documentation needs, or how the process works, we've covered the essential information below.
What is a bridge loan?
How fast can I close with a bridge loan?
What are the typical terms for bridge loans?
How much can I borrow with a bridge loan?
What credit score do I need for a bridge loan?
What are the interest rates for bridge loans?
What fees should I expect with a bridge loan?
What documentation do I need for a bridge loan?
How do bridge loans work for fix-and-flip projects?
Can I use a bridge loan for portfolio expansion?
What is the difference between hard money and bridge loans?
What exit strategies do lenders look for?
How much equity do I need for a bridge loan?
Chad Ellis
Loan Officer at Rain City Capital
Chad Ellis Customer Reviews
Read verified customer reviews for Chad Ellis at Rain City Capital. This is real feedback from real borrowers who used Chad Ellis and their colleagues for a mortgage loan.
"I had the pleasure of working with Carolina on my recent real estate purchase, and I couldn't be happier with the experience. From start to finish, she was amazing—extremely responsive, knowledgeable, and always available to answer my questions. Carolina made the loan process smooth and stress-free, keeping me updated every step of the way. Her professionalism and dedication truly stood out, and I felt supported throughout the entire transaction. I highly recommend Carolina to anyone in need of a reliable and attentive lender."
"Julian is one of the best in the business. We've worked with him on multiple deals, and he consistently delivers, always funding on time and making the process seamless. He's professional, responsive, and communicates clearly every step of the way. If you're looking to close your property on time and work with someone you can rely on, I highly recommend working with Julian. It's always a pleasure doing business with him."
"Team Brosy (Alex & Josh) at rain city capital are one of my favorite lenders i work with. they are very quick on turn around to getting funding, fastest i've done was 7 days with them and they worked super hard to getting my shoreline flip funded last month. Their rates im very happy with. They're very communicative as well. Thank you guys! the photo attached is a previous deal they funded for me"
Fix-and-Flip Entrepreneur
Maria used a bridge loan to quickly acquire and renovate a distressed property, then sold it for profit within 12 months.
Portfolio Expansion
Ken secured a 12-month bridge loan using equity in his current property to expand his rental portfolio before refinancing.
Opportunistic Buyer
Olivia used a bridge loan to make a competitive, non-contingent offer on a fast-moving investment property.
Value-Add Strategy
An investor used bridge financing to acquire a property for renovation and rental stabilization.
| Scenario | Description |
|---|---|
| Fix-and-Flip Entrepreneur | Maria used a bridge loan to quickly acquire and renovate a distressed property, then sold it for profit within 12 months. |
| Portfolio Expansion | Ken secured a 12-month bridge loan using equity in his current property to expand his rental portfolio before refinancing. |
| Opportunistic Buyer | Olivia used a bridge loan to make a competitive, non-contingent offer on a fast-moving investment property. |
| Value-Add Strategy | An investor used bridge financing to acquire a property for renovation and rental stabilization. |
Similar Mortgage Programs to Bridge Loans
If bridge loans are not the right fit, these alternative programs might work better for your situation. Each has different requirements and lenders who specialize in helping borrowers with specific challenges get approved for mortgages.
Asset Depletion Loans
Learn about asset depletion loans for borrowers with substantial assets. Connect with lenders who offer asset-based mortgage programs.
Construction-to-Permanent Loans
Build your dream home with a single loan that covers construction and converts to permanent financing. Perfect for custom home builders and those wanting to build from the ground up.
DSCR Loans
Debt Service Coverage Ratio loans for real estate investors. Perfect for purchasing rental properties based on rental income rather than personal income.
Important Compliance Information
Disclaimer: This information is for educational purposes only. AnotherLender.com is not a lender and does not make loans. We connect borrowers with licensed mortgage professionals. All loan approvals are subject to lender underwriting guidelines and individual qualification. Rates and terms may vary. Consult with a qualified mortgage professional for personalized advice.