Multifamily Bridge Loans

Bridge Loans For Apartment Buildings and Commercial Real Estate

Non-recourse multifamily and commercial property bridge loan rates and terms vary subject to sponsorship, loan amount, property type, leverage and the purpose behind the bridge funding. Bridge loans are commonly used to finance construction completion, stabilization, rehabilitation, as well as borrower/property legal, financial, and credit issues.

Bridge loans are ideal for repositioning a property in order to get competitive permanent financing or to sell the asset after the project is stabilized. Multifamily bridge loans can be taken out with Fannie and Freddie loans, CMBS financing or other bank loans. Most of the same opportunities exist with commercial real estate bridge loans in general outside of Fannie Mae and Freddie Mac permanent financing options. 

Sample Bridge Loan Terms for Multifamily and Commercial Properties in 2024

• Size: $1 million and up.

• Term: 6 months to 2 years (extension options available)

• Interest Rates: Vary (for credit and legal issues rates are in the teens).

• Amortization: Generally interest-only

• Maximum LTV: Generally up to 75% of cost (LTC) capped at 70% of the completed or stabilized value.

Advantages

• Loan amounts are determined by total project cost or completed value and not necessarily on income in place or the as-is value, although in-place income helps drive down rates.

• Fast closing process.

• Available when other portions of the credit market are locked up tight.

Disadvantages

• Very expensive if the loan is for financial, legal, or credit issues.

• Loans are short-term and generally need to be replaced inside 24 months.