Bridge Lending Solutions

Last updated: March 5, 2025

You want fast access to capital that keeps your real estate projects moving forward. Bridge lending solutions can be the key to securing timely funds when you face tight timelines or unexpected hurdles.

With bridge financing you can complete acquisitions refinance existing loans or cover construction costs while you pursue long-term funding or sale. These transitional loans are inherently fast and flexible to help you capitalize on fix and flip, fix and rent and stabilized opportunities.

What is a bridge loan?

A bridge loan is short-term financing that helps you secure immediate capital for your 1–4 unit, single family residential investment property. It covers the gap until you finalize longer-term funding or complete a sale. Many real estate investors, including fix and flip investors, rental property investors, and wholesalers use bridge loans to handle acquisition costs or critical repairs when timing is tight. This type of loan often relies on the property itself as collateral, which makes it flexible for those needing fast underwriting.

Some private lenders categorize a bridge loan as a type of hard money loan. Terms commonly range from 3 to 36 months, which provides a window for projects that require quick turnaround or strategic transitions. Real estate investing strategies, such as renovating single-family homes or stabilizing rental properties, benefit from this accelerated funding. The speed of these loans can help you move forward when traditional financing takes too long.

Who uses bridge loans?

Bridge loans are used by all types of real estate investors including flippers, rental investors (aka "BRRRR Method"), and wholesalers.

Bridge loans for investment properties

Bridge loans for investment properties offer a short-term financing path for your real estate investing projects. They typically range from 3 to 36 months, and they rely on your property’s equity rather than your personal credit profile. If your timeline is tight, or if you’re waiting for a more permanent loan, bridging can fill that gap.

Many fix and flip investors rely on a hard money loan from a private lender to tackle renovations or unexpected expenses. Bridge funding also helps when you’re generating future rental income, but need immediate cashflow for 1–4 unit, single-family residential properties. Investors use these loans to address critical repairs, finalize acquisitions, or prepare assets for broader financing.

Stabilized bridge loan

A stabilized bridge loan is a short-term financing option for properties that are "stabilized" -- this means they do not require rehab, there is no deferred maintenance.

Why are stabilized bridge loans used?

Stabilized bridge loans are most commonly used in the following scenarios:

• Fix and flip investor completed their rehab but their hard money "fix and flip" loan is maturing and they need to refinance it. They need several more months to list and sell the property and their current hard money lender wants to be paid off.
• Fix and flip investor completed their rehab but needs a few more months to list and sell the property. Meanwhile, they need cash to purchase their next flip from a seller that needs a fast cash closing.
• Fix and rent investor completed their rehab but wants to wait several more months to either refinance at lower interest rates or sell.
• Fix and rent investor in under contract to purchase a tenant-occupied rental property with no deferred maintenance and promised the seller a fast close (5 - 15 days) and isn't willing to risk the 15 - 45 days it can take to purchase with a DSCR loan.

This arrangement transitions your rehabbed fix and flip project or rental property from earlier financing phases into more permanent loan commitments. Private lender structures often resemble a hard money loan though they sometimes involve streamlined underwriting when the property is generating revenue. This approach supports your real estate investing goals by letting you finalize any last improvements and maintain consistent cash flow. It's also beneficial for timely acquisitions in situations where there's limited time to secure long-term financing. Expedited closings are common especially for 1–4 unit single-family investment properties.

What are common stabilized bridge loan terms?

Bridge vs Hard Money vs Fix and Flip vs Private Money

In the world of real estate investing, there is endless confusion caused by inconsistent naming of loan programs. There is perhaps no better example than bridge lending solutions which are referred to the following interchangeably:

• Bridge loan
• Hard money loan
• Fix and flip loan
• Private loan
• RTL (residential transition loan)

These are all essentially the same exact thing...

✅ Short term
✅ Interest only
✅ Residential real estate

Some lenders and investors call fix and flip loans, hard money loans and stabilized bridge loans "bridge loans" while others call them "hard money loans" while others call them "fix and flip loans". Some differentiate a bridge loan from a hard money loan if it is purely to help the investor bridge from cash or existing debt to sale or refinance into a DSCR loan.

Perhaps the most important point of distinction is the value basis of the loan. If the value basis of the loan is the current value, it is most likely to be called a "bridge loan". If the value basis of the loan is the ARV, then this implies there is planned rehab and the loan will most commonly be referred to as a "fix and flip loan".

For this reason, it's important to make sure you and your lender speak the same language! Ask for clarification on the nomenclature of their loan programs. Explain the funding you are looking for and ask directly whether or not they offer it.

Fix and flip bridge loan

A fix and flip bridge loan is also commonly referred to as a "fix and flip loan" or a "fix and rent loan" or a "hard money loan" or a "bridge loan". These are all the same thing (with minor variations based on specific lender guidelines) -- short-term financing that helps you access quick capital for purchasing/refinancing/renovating 1–4 unit single-family residential investment properties.

This approach often qualifies as a hard money loan from a "private lender", "hard money lender" or "bridge lender". Loan terms and approval rely heavily on your property’s after-repair value ("ARV") and your track record or lack thereof. Fix and flip loans usually include an initial advance and a construction holdback which is funded via draw processing (reimbursement for progress against your scope of work rehab budget).

Fix and flip loan terms

Use this fix and flip loan structure to tackle urgent improvements and prepare the property for resale or rental. It’s flexible and typically depends on collateral rather than personal credit. You can finalize upgrades or repairs more rapidly and transition to long-term financing once occupancy and income benchmarks are stable. This strategy is especially beneficial in real estate investing when traditional methods are time-consuming and opportunities are time-sensitive.

Loan terms based on experience

Some lenders only work with experienced investors -- those with a minimum number of similar verifiable completed rehab projects. Other lenders will adjust terms, typically the initial advance, based on experience. The initial advance is the loan to purchase price. If you're buying a property for $100,000, and your initial advance is 85%, then the lender will fund $85,000 of the loan towards the purchase and then fund up to 100% of the rehab budget as a construction holdback

Bridge loan vs Hard money loan

Bridge loans for real estate investors are the same thing as hard money loans -- just a different name. These are short term, interest only loans secured by the residential property being purchased/rehabbed/refinanced.

Bridge loan vs Fix and flip loan

Bridge loans for real estate investors are the same thing as fix and flip loans -- just a different name. These are short term, interest only loans secured by the residential property being purchased/rehabbed/refinanced. The difference may be that a given lender may call it a bridge loan if there is no planned rehab and the loan amount is based on the As Is value of the property and a fix and flip loan when there is planned rehab and the loan amount is based on the ARV.

If there is no planned rehab, the value basis of the loan will be the As Is value of the property as determined by appraisal or in-house valuation by the lender. In this scenario, a lender may be willing to lend up to 70% of the current value of the property because the borrower is not planning to increase the value of the property by renovating it.

If there is planned rehab, the value basis of the loan will be the ARV which is determined by appraisal or in-house valuation. In this scenario, the lender may be willing to lend up to 75% of the ARV to provide funding for both the purchase and the rehab budget.

Bridge loan interest rates

Bridge loan interest rates typically run higher than conventional mortgages because of the short-term risk and project execution risk. Currently, the most reputable private lenders are quoting from 10% to 16% for 1–4 unit single-family investment properties. Factors that affect your rate include:

• "Risk free" interest rate -- the 2 Yr and 5 Yr US Treasury government bond interest rate at the time of loan commitment are the most common benchmarks.
• "Credit spread" or "risk premium" demanded by the lender -- many bridge lenders look for a credit spread of 6% to 8% above the risk free rate.
• Expected project duration -- projects that are up to 12 months will have a slightly lower credit spread than projects that are expected to be 12 - 24 months.
• Expected profit -- deals with a lot of implied profit are considered less risky and some lenders may offer slightly lower credit spread than deals with less margin for error.
• Similar verifiable completed project experience -- there's a tremendous amount of execution risk in real estate investing that involves accurately comping, efficiently rehabbing and selling. Borrowers who have a proven track record often qualify for lower rates and higher LTV.
• Degree of project difficulty -- "full gut" rehab projects that have a high risk of cost overrun and delay increase the risk of default and therefore may carry a higher interest rate than a simple "cosmetic" rehab with a low budget and fast turnaround.
• Requested leverage (LTARV) -- as loan to after-repair value approaches a lender's maximum, the lender may charge a slightly higher interest rate to compensate for the increased risk that a sale or refinance may require the borrower to bring cash to closing if there are cost overruns, delays or market downturn.

These details let you compare bridge loan quotes from multiple sources, and offer insights into how to work with private lenders to structure deals that work for your goals and their bridge lending guidelines.

Bridge loan terms

Bridge loans including fix and flip loan structures typically offer 3 to 36-month durations. Your private lender often quotes interest rates between 7% and 13% if the collateral meets certain equity thresholds. Repayment usually involves monthly interest-only payments with a balloon at maturity. Some consider a bridge loan a type of hard money loan especially when time-sensitive real estate investing timelines are critical.

Below is a reference table of common terms for 1–4 unit single-family bridge loans:

One "gotcha" term that many bridge lenders include which you should be careful to avoid is "points out". Points out is typically a fee of 1% or 2% of the loan amount that the lender includes on your payoff statement when you are ready to pay off your bridge loan via refinance or sale of the property.

Some lenders allow prepayment without penalty if the loan is repaid before maturity. The property’s after-repair value is often a key factor when you plan urgent renovations that require an immediate influx of cash.

Bridge lenders

Bridge lenders provide short-term capital for real estate investing strategies with a focus on rapid funding. There are bridge lending solutions for purposes other than investment property real estate, this article is not focused on those applications of bridge lending which may include loans for general business purpose, or personal matters.

Bridge lenders rely on the property’s collateral for quick underwriting. A bridge loan from a private lender often follows a structure similar to a hard money loan, where the emphasis is on the asset’s equity rather than your personal credit. Fix and flip investors often benefit from these solutions by tackling immediate repairs or upgrades while waiting for a long-term option. Typical durations range from 3 to 36 months, and many lenders release funds in 3 to 14 days if the property and borrower meets their criteria. This key speed lets you secure discounted deals or refinance expiring loans when timing is critical.

Hard money lender vs Private money lender

There is technically no difference between hard money lenders and private money lenders if both lenders provide loans backed by real estate. Some private lenders do not want to be referred to as hard money lenders because they feel there is a negative connotation to the term "hard money". To be clear, "hard money" means there is a hard asset serving as collateral for the loan. A private lender can be a bridge lender can be a hard money lender. Many private lenders provide bridge loans and refer to themselves as "hard money" lenders.

Hard money lenders focus on collateral value while offering short-term financing for 1–4 unit single-family residential investment properties. They often categorize their funding as a hard money loan, especially when you're pursuing a fix and flip loan. They lean on the property's equity, sometimes up to 80%, and quote interest rates in ranges of 10% to 16%. Examples of important factors include after-repair value and time-sensitive renovations. They streamline underwriting steps to expedite closings, which can take as little as 3 days.

Some people differentiate a lender as a "Private money lender" if they fund deals using personal or pooled capital. In reality, hard money lenders use personal and pooled capital as well. They frequently serve as bridge loan providers when urgent timelines arise. They rely on flexible terms and consider your track record, often partnering with investors who have local market experience. Examples of underwriting considerations include the property's condition or projected rental income. They tend to negotiate case by case, focusing on relationships and unique project details rather than standardized requirements.

Risk of bridge loans

Bridge loans, including fix and flip loan structures, can provide quick capital but also involve higher interest rates between 10% and 16% and many lenders require personal guarantee. If the project faces challenges and you struggle to repay your bridge loan, you may face foreclosure and your lender may pursue recourse with a claim on your personal assets (if you are personally guaranteeing the loan) to satisfy repayment of principal loan amount, unpaid interest and legal fees.

⚠️ Lower profits due to higher interest fees
⚠️ Foreclosure if loan is in default due to missed payment
⚠️ Forfeiture of personal assets if loan is personally guaranteed and foreclosure is insufficient to recoup principal loan balance, unpaid interest and legal fees

Pros and cons of bridge loans

Pros of bridge loans

✅ Fastest funding compared to banks and other non-bank lenders
✅ Flexibility terms can generally be structured based on your unique needs and credit profile
✅ Scalability there are fewer limits to the number of concurrent projects compared to traditional lenders
✅ Optionality while bridge loans are a preferred financing method for many real estate investors, they can also be an option of last resort for those who prefer to work with traditional banks and find themselves in difficult situations

Cons of bridge loans

❌ Higher risk of default bridge loans enable real estate investors to take on projects that are inherently risky. Higher interest expense cuts into profitability and cash flow and increases the risk of default.
❌ Higher risk of foreclosure given the higher risk of default, there is higher risk of foreclosure.
❌ Higher risk of asset forfeiture for bridge loans that are personally guaranteed, there is a risk that the lender will not be able to fully recoup unpaid principal balance, unpaid interest and unpaid legal fees without also pursuing your personal assets as agreed to in your guaranty.

Frequently Asked Questions

What is a bridge loan?

A bridge loan is short-term financing that provides quick access to capital for real estate projects, typically for 1–4 unit single-family investment properties. It helps investors cover costs like acquisitions, renovations, or refinancing while they wait for long-term funding. Collateral usually rests on the property itself, and terms often range from 3 to 36 months. This interim financing option is popular among real estate investors—particularly those in fix-and-flip projects—who need immediate funds to move fast on time-sensitive deals or urgent repairs before securing more conventional, long-term financing solutions.

How does a fix-and-flip bridge loan work?

A fix-and-flip bridge loan offers short-term funding for investors looking to purchase a property, renovate it quickly, and then sell or rent it. The loan is often based on the property’s after-repair value, not the borrower’s credit score. Terms are typically between 3 to 36 months, with interest rates higher than conventional loans. This setup helps investors tackle urgent upgrades or repairs and then refinance or sell once the property is stabilized. Because funding is fast, it’s a valuable tool for time-sensitive projects needing quick improvements for resale or rental income.

Are bridge loans considered hard money loans?

Yes, many bridge loans fall under the category of hard money loans. Both focus on the property’s collateral rather than the borrower’s personal credit profile. Private lenders often structure these loans with shorter terms—usually between 3 to 36 months—and higher interest rates. Hard money loans, including bridge loans, address immediate funding needs for real estate investors. They’re popular for quick acquisitions, urgent renovations, or covering gaps between two funding sources. While terms vary by lender, the overarching feature is fast underwriting, allowing investors to seize opportunities without prolonged application processes.

When do I need a stabilized bridge loan?

You might need a stabilized bridge loan when there is no deferred maintenance of your investment property and one of the following scenarios arises:

• Hard money fix and flip loan has matured and the current lender wants to be paid off.
• You need access to cash for your next real estate acquisition and you do not have enough time to sell or refinance a given stabilized property with a DSCR loan.

How do bridge loans compare to fix-and-flip loans?

Both are short-term financing options focusing on real estate collateral, but bridge loans cover broader transitional financing for acquisitions or refinances, whereas fix-and-flip loans specifically target renovation projects. Bridge loans help secure quick capital while awaiting a longer-term solution, but fix-and-flip loans concentrate on property improvements and rely heavily on its after-repair value. Lender requirements, interest rates, and terms for both vary, but they’re often higher and shorter than conventional mortgages. Investors choose between these types based on their project’s goals, deadlines, and the specific need for either renovations or general financing flexibility.

Why do bridge loan interest rates run higher than traditional loans?

Bridge loan interest rates are higher because lenders take on greater risk with shorter repayment periods and property-based collateral. The loan’s purpose—fast funding for quick turnarounds—also impacts rates. Private lenders often charge between 10% to 16%, depending on the property’s condition, loan-to-value ratio, and the borrower’s exit strategy. The premium pricing compensates for expedited underwriting and the possibility that the transaction may involve renovations, repairs, or uncertain market conditions. By paying a higher interest rate, investors can quickly secure capital and focus on completing critical projects without waiting for a slower, conventional mortgage.

What are typical terms for fix-and-flip bridge financing?

Most fix-and-flip bridge loans carry terms between 3 to 36 months, providing enough time for rapid renovations and resale or refinancing. Interest rates often range from 10% to 16%, with repayment structures usually involving interest-only payments and a balloon payment at maturity. Some lenders allow early repayment without penalties. Funding can be as fast as 3 to 14 days, depending on the lender’s underwriting speed. Valuations largely hinge on after-repair value rather than credit scores, offering investors flexibility when they need immediate capital to transform and stabilize a property before seeking long-term financing.

How quickly can I get funding with a bridge loan?

Bridge loan approvals can be completed in as fast as 3 to 14 days, depending on the lender’s process and the complexity of the project. Private lenders streamline their underwriting by focusing on the property’s collateral rather than a detailed credit analysis. This speed makes bridge loans ideal when timing is critical—like capturing a discounted deal or refinancing an expiring loan. Even though you’ll likely pay higher rates than traditional loans, the quick turnaround can help secure immediate capital, avoiding missed investment opportunities or project delays that could harm profits.

What documents are needed for a bridge loan application?

Bridge lenders often require a loan application which authorizes them to run your trimerge credit report and background report.

They will generally collect your scope of work if there are repairs to be completed or repairs that you have already completed, along with your 2 or 3 most recent bank statements. Brokerage statements and retirement account statements are usually allowed instead of bank account statements.

Business purpose bridge lenders may be willing to lend to you in personal name but most likely will require the loan to be provided to your business entity, of which LLC is strongly preferred and the most common. You will therefore need to provide borrowing entity documents.

You will also need to obtain investment property insurance details, utility statements (water, sewer, fuel, and electricity), maintenance records, and any available property operating statements from the past two years.

Because approvals focus on the project’s viability, the lender may require an in-house or 3rd party valuation (i.e. appraisal). Be prepared to show property valuation reports, repair estimates, or after-repair value assessments.

Additional documentation may vary by lender. Although the process is quicker than a conventional mortgage, presenting complete and accurate documentation can expedite funding.

What is the minimum FICO score for a bridge loan?

While bridge loans emphasize the property’s collateral, many lenders still consider the borrower’s creditworthiness. Borrowers often need at least a 680 FICO score while some lenders have a 620 minimum mid score on your trimerge credit report. A higher FICO score helps you secure better interest rates and terms.

Is DTI considered for a bridge loan?

Debt-to-income is generally not factored into the lender's decision though lenders may consider your current debt obligation across personal and business loans.

What is the average interest rate on a bridge loan?

As a rule of thumb, 12% is the most common standard bridge loan interest rate.

How much are closing costs on a bridge loan?

Lender related fees (not including other 3rd party fees such as title, real estate agent commission) typically range from 1.5% to 4% of the loan amount though this can be substantially higher for low balance loans (i.e. loans under $100,000).

---

---

Find, fix and flip with OfferMarket

Our mission is to help you build wealth through real estate. Month-in and month-out, thousands of real estate investors leverage our platform in the following ways:

🏚️ Off market properties
💰 Fix and Flip/Rent loans
☂️ Insurance rate shopping
💡 Market insights

---