Get a hard money construction loan to finance your next real estate project. Fast approvals, clear terms, and flexible funding can boost your growth.

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Hard Money Construction Loan Options for Fast Funding

Hard Money Construction Loan: Fast Funds for Real Estate Projects and Quick Approval

## What is a mortgagee clause?

 

A mortgagee clause typically is a provision included in a property insurance policy protecting the mortgagee (lender) from financial loss in the event mortgaged property is damaged -- physical or otherwise. Put another way, a mortgage clause is insurance coverage between the lender and property insurance company that protects the lender and their interest in the property. Most commonly this protects lenders downside when there is physical damage done to the property and it was not initially reflected in the valuation of the property. This clause is often added to homeowners insurance policy (and increases its costs for the homeowner) and is required by mortgage lender to be able to extend a mortgage loan. 

 

In other words, if the property suffers damage, the insurer agrees to financially compensate the mortgagee for their portion of the loss. This is a risk reducing mechanism that enables a vibrant and hyper active lending system which makes it easier for borrower to get a loan, for mortgage originators to function and underwrite such loans and for mortgage investors to repurchase packaged loans in the secondary markets. More on these mechanics below...

 

## Protection for the lender helps the lending system function

 

The main purpose of the clause is to provide protection to the mortgage lender so their returns on extending a loan for the property is protected in case of substantial damaged or even destroyed. This mechanism allows for shifting of risk from mortgage lender to the insurer, so in case of a cataclysmic event the financial burden is split, which allows for mortgage lenders to extend far more loans to the buyers, allowing more families to move into their homes and enjoy benefits of home ownership. Risk is an important consideration for lenders because thats a useful tool for quantifying their exposure to downside financial risk inherent to their business. Shifting this risk or distributing it between parties within the transaction is an important mechanism that allows creation of new, more sophisticated, and robust systems that allow more access to capital at cheaper rates, allowing everyone who are part of the system to thrive. 

 

Without this mechanism, mortgage lenders would need to be much more risk averse and tightening their lending standards. Which would impact buyers ability to purchase homes. Usually this would mean that buyers would have to put more money down to purchase a property, have higher credit scores, buyer lower valued properties, some areas would be underbanked due to higher perceived risk from the lender, or they would required co-guarantors or co-signers, overall making a loan issuance a much harder process for the borrower. 

 

## Protection of the clause doesn't just protect the original lender

 

The protection granted by the clause doesn't just protect the original mortgage lender. The clause includes [ISAOA]("https://www.offermarket.us/real-estate-glossary/isaoa-atima"), or "It's success and/or assigns" term, sometimes written as "successors and or assigns", which means that the insurance protection extends or grants continuing to any financial institution that may repurchase the mortgage loan from the original loan issuer. This is done because, given how the current mortgage loan industry is structured, most commonly, originator of the loan, the first company that issues doesn't hold it to maturity, for the whole 30 year or 15 year term. Instead they package many such loans together into whats called a vintage and sell them to investors that do hold them for 15 to 30 years in order to collect the coupon payments. 

 

These investors also want to be protected from potential damage to the property under home owners insurance for the duration of the loan, which is often substantial. If this extension under [ISAOA]("https://www.offermarket.us/real-estate-glossary/isaoa-atima") didn't exists, this secondary market would evaporate overnight, and originators (first issuer of the load would have to hold them until maturity), which would cascade into much stricter rules on original issuance due to much higher risk they would bear, ultimately making it significantly harder for buyers to get a loan. 

 

The protection of the clause often covers not only originator (original mortgage lender), mortgage investor (buyer of mortgage loan packages from the original lender) but also to any company that also works with already protected party. For example, if there are some subcontractor, rental equipment operators, or vendors working on the property and their equipment gets damaged while they are doing anything for the insured parties (home owner or their lender), the [ATIMA]("https://www.offermarket.us/real-estate-glossary/isaoa-atima") protection kicks in and covers them under the mortgagee clause, leaving the insurance on the hook instead of homeowner or the lender, making them a loss payee instead of the lender or homeowner.

 

Once again, this is done to further reduce risk for the lender so the whole lending system can continue issuing loans and make insurers deal with actual, often physical risks of home ownership, while lenders are only exposed to the risks carried by the personal profile of the homeowner, such as their personal ability to pay down the loan for its duration.


## How to add a mortgagee clause

 

If you are a [private lender](https://offermarket.us/real-estate-glossary/private-lender) providing a private loan to a real estate buyer (borrower), you can have the borrower contact their property insurer to add a mortgagee clause with you as the mortgagee. Almost all home insurance companies have experience with adding these clauses because any government backed mortgage loan must include such a clause to make it count as a standard loan that can be packaged or securitized into vintage which then can be resold in secondary markets for investors to hold until maturity. 

 

Here is a mortgagee clause for an OfferMarket single family rental property that is insured by [OfferMarket Insurance](https://www.offermarket.us/insurance):

 

OfferMarket Capital LLC ISAOA/ATIMA
627 S Hanover St
Baltimore, MD 21230

 

## [Introducing OfferMarket Capital](https://www.offermarket.us/loans)

 

Take your real estate investing to the next level with OfferMarket Capital. Access the most competitive and transparent rates on bridge loans (fix and flip) and 30 year fixed rate rental loans (purchase and refinance). 

 

## Concepts related to Mortgagee Clause

 

- [ISAOA/ATIMA](https://www.offermarket.us/real-estate-glossary/isaoa-atima)
- [Mortgage Loan Originator](https://www.offermarket.us/real-estate-glossary/mortgage-loan-originator)
- [Landlord Insurance](https://www.offermarket.us/real-estate-glossary/landlord-insurance)
- [DSCR Loan](https://www.offermarket.us/blog/dscr-loan)

A mortgagee clause is a provision included in a property insurance policy protecting the mortgagee (lender) from financial loss.

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Mortgagee Clause - Real Estate Glossary - OfferMarket

What is a Mortgagee Clause?

**Last updated:** February 13, 2025

 

**90 LTV Bridge Loans: A High-Leverage Solution for Real Estate Investors**

 

When it comes to real estate investing, timing is everything. Whether you’re looking to capitalize on a new opportunity or quickly unlock equity in an existing asset, having the right financing at your disposal can make all the difference. One financing tool that has gained popularity among seasoned and novice investors alike is the **90 LTV bridge loan**. In this in-depth article, we’ll break down what 90 LTV bridge loans are, how they work, their pros and cons, and how to determine if this financing strategy aligns with your real estate investing goals.

 

## **What Is a Bridge Loan?**

 

A **bridge loan** is a short-term loan used to “bridge” a gap in financing between two different events or transactions. In real estate, bridge loans often help investors:

1. **Purchase a new property** before selling an existing property. 
2. **Access equity** quickly for renovations, improvements, or other investments. 
3. **Take advantage of time-sensitive deals** (like off-market opportunities or distressed properties).

 

Unlike traditional mortgages or conventional bank loans, bridge loans typically involve less documentation, quicker closing times, and higher interest rates. Because of these features, bridge loans are often favored by real estate investors who understand that speed can outweigh cost if it means acquiring a high-potential property before someone else does.

 

## **Understanding LTV (Loan-to-Value)**

 

**Loan-to-Value (LTV)** is a core concept in real estate financing. It measures the relationship between the loan amount and the property’s value (or purchase price, whichever is lower in many cases). Specifically:

 

LTV = Loan Amount / Value Basis

 

Where Value Basis is the lower of the purchase price or As Is value.

 

For example, if a property is valued at $500,000 and a lender offers $450,000 in financing, the LTV is 90% ($450,000 / $500,000).

 

* **Higher LTV** means the lender is taking on more risk because they are financing a larger portion of the property’s value. 
* **Lower LTV** means the borrower has a larger equity stake (down payment or existing equity) in the deal, which lowers the lender’s risk.

 

## **What Makes a 90 LTV Bridge Loan Unique?**

 

A **90 LTV bridge loan** stands out for its high leverage—financing up to 90% of a property’s value. This higher LTV allows investors to put less money down or to refinance a more significant portion of their equity. In other words, **you only need to come up with 10% of the property’s value** from your own pocket or other financing sources.

 

### **Key Characteristics**

1. **Short-Term Nature** 
 Bridge loans commonly range from 6 to 24 months. This temporary financing window is designed to be long enough to execute a business plan—like repairing and upgrading a property—yet short enough to transition into permanent financing or sell the property. 
2. **Faster Approvals** 
 Hard money or private money lenders that offer bridge loans can often approve and fund deals in a matter of days to a few weeks, a crucial advantage when competing for properties in hot markets. 
3. **Asset-Based Underwriting** 
 Since a bridge loan is usually backed by the property itself, lenders focus more on the collateral’s value and the borrower’s exit strategy than on the borrower’s credit scores and financial statements. However, lenders still evaluate financials and experience, especially when offering 90 LTV. 
4. **Higher Interest Rates and Fees** 
 Because of the higher risk and shorter term, bridge loans often carry higher interest rates and origination fees. Borrowers must factor these costs into their investment strategy to ensure the deal remains profitable.

 

## **When to Consider a 90 LTV Bridge Loan**

Not every real estate deal warrants a 90 LTV bridge loan, but it can be a valuable tool in situations where maximizing leverage and speed can outweigh the additional costs. Here are some common scenarios:

 

1. **Fix-and-Flip Projects** 
 If you’re planning to buy a distressed property and renovate it for a profit, a 90 LTV bridge loan can provide the bulk of acquisition and sometimes even a portion of the rehab budget. This allows you to conserve cash for construction costs or unexpected contingencies. 
2. **Equity Unlock** 
 You may already own a property with significant equity, but you need the cash for a new investment. A bridge loan can unlock that equity quickly, giving you the liquidity to act fast on time-sensitive deals. 
3. **Buying Before Selling** 
 Homeowners or investors who need to purchase a new property before selling their current one can use a bridge loan to finance the new purchase. Once the old property sells, the proceeds can be used to pay off or refinance the bridge loan. 
4. **Distressed or Time-Sensitive Acquisitions** 
 When a lender or seller sets a tight closing window, a 90 LTV bridge loan can help you move quickly. After stabilizing or improving the property, you can refinance into a more traditional (and typically lower interest) long-term loan.

 

## **Pros of 90 LTV Bridge Loans**

 

1. **High Leverage** 
 The obvious benefit is that you only need to come up with 10% of the property’s value. This can be a game-changer for investors who have strong deal flow but limited capital on hand. 
2. **Speed of Funding** 
 Many deals fall through because the buyer cannot secure financing in time. Bridge loan lenders understand the urgency of real estate deals and typically close much faster than traditional lenders. 
3. **Flexible Underwriting** 
 With asset-based lending, your credit score and financial statements are important but secondary. The property’s current and projected value (after rehab or stabilization) holds more weight in the underwriting decision. 
4. **Opportunity to Diversify Capital** 
 By minimizing the equity you invest in a single property, you can retain more capital to pursue multiple deals simultaneously, accelerating the growth of your real estate portfolio.

 

## **Cons of 90 LTV Bridge Loans**

 

1. **Higher Interest Rates** 
 More risk for the lender translates into higher interest rates for you. This cost must be carefully accounted for in your business plan. 
2. **Additional Fees** 
 Origination fees, exit fees, and other charges can add up. These costs can reduce profit margins if not properly budgeted. 
3. **Short Repayment Period** 
 If your exit strategy (e.g., selling or refinancing) is delayed, you may need to extend the loan or secure another financing option—often at an additional cost. 
4. **More Stringent Conditions** 
 While the underwriting focus is more on the property, lenders offering 90 LTV often require a well-defined exit strategy, reserves, and a solid track record from the borrower (especially for extensive rehab projects).

 

<div style="display: grid; grid-template-columns: repeat(1, minmax(0, 1fr)); overflow: auto; white-space: nowrap;">
<table>
 <thead>
 <tr>
 <th>Pros</th>
 <th>Cons</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td>
 <ul>
 <li>Higher Leverage: Invest less of your own capital while still acquiring property.</li>
 <li>Faster Funding: Approvals and closings can occur within days or weeks.</li>
 <li>Flexible Underwriting: Primarily based on the property’s value and exit strategy rather than personal credit.</li>
 <li>Opportunity for Quick Profit: Useful for flips or short-term projects where speed and leverage matter more than the cost.</li>
 <li>Capital Diversification: Preserve your cash reserves to fund multiple deals simultaneously.</li>
 </ul>
 </td>
 <td>
 <ul>
 <li>Higher Interest Rates: Lenders charge more to offset the increased risk of a high LTV.</li>
 <li>Additional Fees: Origination and exit fees can be higher and impact overall profit margin.</li>
 <li>Short-Term Repayment: Loans typically must be paid off or refinanced quickly, often within 6–24 months.</li>
 <li>Strict Exit Strategy Requirements: Lenders may require a solid plan to sell or refinance.</li>
 <li>Exposure to Market Fluctuations: Quick market changes can affect property values, creating refinance or sale challenges.</li>
 </ul>
 </td>
 </tr>
 </tbody>
</table>
</div>

 

## **Underwriting Factors for 90 LTV Bridge Loans**

 

Getting approved for a 90 LTV bridge loan involves meeting certain criteria that reassure lenders of both the borrower’s capability and the project’s profitability. Some of these factors include:

 

1. **Property Value and Condition** 
 Lenders typically require an appraisal or valuation to confirm the property’s current and potential value (ARV, or after-repair value). They also evaluate the property’s condition—whether it’s a cosmetic fixer or requires major structural work. 
2. **Exit Strategy** 
 A clearly defined plan for how you’ll repay the bridge loan is critical. This could be selling the property post-renovation or refinancing into a long-term mortgage once the property is stabilized. 
3. **Borrower Experience** 
 Lenders often look favorably on borrowers with a successful track record of real estate projects—especially fix-and-flip or buy-and-hold investments. Demonstrated experience can sometimes improve loan terms. 
4. **Down Payment and Reserves** 
 Even though the LTV is high, lenders may still require that you show sufficient cash reserves to cover holding costs, interest payments, and potential overruns on rehab. 
5. **Creditworthiness** 
 While bridge loan underwriting can be more flexible, having decent credit can help you secure more favorable terms (such as lower interest rates or fees).

 

---

 

[![Need a Bridge Loan.jpg](https://cms.offermarket.us/uploads/Need_a_Bridge_Loan_5cb7b440fd.jpg)](https://www.offermarket.us/loans?ref=90-ltv-bridge)

 

*click the image and select the 'Fix and Rent Loan' option for an instant quote.*

 

---

 

## **Crafting a Profitable Investment Strategy**

 

To maximize the benefits of a 90 LTV bridge loan, investors should carefully plan out each phase of their deal.

 

1. **Property Assessment** 
 Conduct a thorough due diligence: location analysis, comparable sales (comps), estimated rehab costs, and after-repair value projections. 
2. **Financial Analysis** 
 Plug in the bridge loan’s interest rate, fees, and closing costs into a financial model. The numbers must confirm that there is sufficient profit margin (or long-term value if you plan to hold the property). 
3. **Project Timeline** 
 Bridge loans are short-term, so map out renovation schedules, contractor timelines, and listing or refinance timelines. Delays can be costly when you have a higher-interest loan on the books. 
4. **Exit Strategy Planning** 
 Make sure you have a realistic plan for how you’ll sell the property or refinance into a longer-term loan once the value is stabilized. If you plan to hold the property, line up a reliable lender in advance for the take-out financing.

 

## **Common Misconceptions About 90 LTV Bridge Loans**

 

1. **“Only for Distressed Investors”** 
 High-leverage bridge loans are not solely for investors in financial trouble. They are used by savvy investors who value speed and high leverage to capitalize on lucrative opportunities. 
2. **“Too Expensive to Be Worth It”** 
 While these loans do come with higher costs, they can be worth it if the property’s upside potential is significant or if timing advantages allow you to beat out competing buyers. 
3. **“Hard to Qualify For”** 
 Qualifying can be easier from an underwriting perspective (as property value and project potential weigh heavily). However, you still need a strong project plan and, for some lenders, a solid track record.

 

## **Is a 90 LTV Bridge Loan Right for You?**

 

A 90 LTV bridge loan can be an excellent tool for real estate investors who:

* **Have a clear and profitable plan** for the property. 
* **Need to move quickly** in a competitive market. 
* **Want to leverage their capital** to acquire or improve multiple properties simultaneously. 
* **Are comfortable** with short-term, higher-interest debt.

However, if you prefer lower-risk strategies, can’t handle the higher monthly interest payments, or lack a solid exit strategy, a lower-LTV option or a different form of financing (like a conventional loan or a lower LTV hard money loan) might be more appropriate.

 

## **Final Thoughts**

 

A **90 LTV bridge loan** is a powerful tool in the world of real estate investing—offering higher leverage, quicker access to funds, and flexible underwriting. By effectively utilizing this type of financing, investors can secure properties, accelerate property improvements, and position themselves for higher returns. However, this benefit comes at a cost: higher interest rates, fees, and the need for a crystal-clear exit strategy to ensure profitability.

 

If you’re prepared, have a well-researched plan, and are comfortable navigating short-term debt, a 90 LTV bridge loan could be the key to unlocking your next high-potential real estate deal. As always, be sure to conduct thorough due diligence and consult with experienced professionals—lenders, attorneys, real estate agents, and contractors—to ensure you’re making an informed and strategic choice for your investment portfolio.

 

---

 

## **Bridge Loans from OfferMarket**

 

OfferMarket is a leading private lender for rental property investors and we specialize in 1-4 unit residential properties. If you need a bridge loan, reach out to our team and we will be happy to review your deal scenario.

 

If you've found this helpful and would like access to more rental property investing insights, sign up for OfferMarket. Membership is free and comes with the following benefits:

 

🏠 **[Off market properties](https://www.offermarket.us/listings?ref=content-90-ltv-bridge)**
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☂️ **[Landlord insurance rate shopping](https://www.offermarket.us/insurance?ref=content-90-ltv-bridge)**
💡 **[Community & insights](https://www.offermarket.us/login?ref=content-90-ltv-bridge)**

 

If you are not already a member, we hope you will [accept our invitation](https://www.offermarket.us/listings?ref=content-90-ltv-bridge) to join us!

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90 LTV Bridge | OfferMarket Blog

Understanding 90 LTV Bridge Loans

Grow your real estate investing business with the most competitive DSCR loan product. OfferMarket provides DSCR rental loans, bridge loans, hard money, fix and flip, slow flip, and ground up construction loans.

Private Lending | OfferMarket

Private Lending

The Nationwide Multi-State Licensing System or NMLS is the system of licensure for mortgage companies and [mortgage loan originators](https://offermarket.us/real-estate-glossary/mortgage-loan-originator) (MLO) in the United States. The acronym NMLS is commonly interpreted as the Nationwide Mortgage Licensing System.

The Nationwide Multistate Licensing System (NMLS) is the system for mortgage company and loan originator licensure in the U.S.

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What is NMLS in real estate?

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