Investor guide. Updated September 2026
What is a bridge loan for real estate investors and when should you use one?
A bridge loan is a short-term, interest-only loan secured by investment real estate that gets you from one event to another: a fast closing to a bank refinance, an acquisition to a sale, a maturing loan to a new one, or a vacant building to a leased one. In 2026 investor bridge loans typically run 12 to 24 months at 9% to 13% interest with 1 to 3 points, at up to 75% to 80% of value on purchases and 65% to 75% on cash-out, and close in 1 to 3 weeks.
Six situations where a bridge loan is the right tool
- Winning a deal on speed. A seller takes a lower offer that closes in 10 days over a higher one that needs 60 days of bank underwriting. The bridge closes it, then you refinance.
- Buying before selling. Cash-out on a property you own to fund the next purchase, repaid when the first one sells.
- Light rehab or lease-up. A building that does not yet cover its debt service. The bridge carries it until it is stabilized and qualifies for a DSCR or bank loan.
- Maturing loan. Your current lender is not extending and the bank refinance is not ready. A bridge pays it off and resets the clock.
- Auction, estate and distressed purchases. Properties that fail bank criteria as-is because of condition, title or occupancy.
- Partner buyout or 1031 timing. Any transaction where the calendar matters more than the rate.
Typical terms in 2026
| Term | Typical range |
|---|---|
| Loan to value, purchase | Up to 75% to 80% of the lower of price or value |
| Loan to value, cash-out refinance | Up to 65% to 75% |
| Rate | 9% to 13%, interest-only |
| Points | 1 to 3 |
| Term | 12 to 24 months, extensions for a fee |
| Prepayment | Usually none, or a 3 to 6 month minimum interest |
| Property types | 1 to 4 unit, multifamily, mixed use, some commercial and land with entitlements |
| Time to close | 7 to 21 days depending on title, appraisal and insurance |
What the lender underwrites
Three things: the value of the property as it sits, the credibility of the exit, and the borrower's ability to carry the payments until the exit happens. Income documentation is not part of it. Expect a valuation (appraisal or broker opinion), a title search, proof of reserves, and a clear written exit: a refinance approval path, a listing plan, or a lease-up budget with a timeline.
The exit is the whole deal
A bridge loan with no exit is an expensive loan with a cliff at the end. Before you close, know which product takes you out and what it requires. If the exit is a DSCR loan, run the coverage ratio today at a conservative rate. If the exit is a sale, price it below the comps, not at them. If the exit is a bank refinance, ask the bank for its seasoning and occupancy requirements now so the bridge term is long enough.
Bridge versus fix and flip loan
The products overlap. A fix and flip loan is a bridge loan with a construction holdback and draw process. If the property needs more than cosmetic work, the fix and flip structure is usually cheaper overall because the rehab is financed rather than paid from your reserves. If there is little or no work, a plain bridge is simpler and closes faster.
How 316 Capital places bridge loans
316 Capital is a private lending and capital advisory firm. Bridge requests vary more than any other product, from a $200,000 two-family in Brockton to a $4 million mixed-use refinance, and no single capital source does all of them well. We place the file with the partner whose speed and credit box fit the situation and the exit, and stay on it through closing.
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How fast can a bridge loan close?
Seven to ten business days is realistic when title is clean, insurance is bound and a valuation can be done quickly. Three weeks is more typical. Two to three days is possible in rare cases with a broker price opinion and an existing title policy.
Can I get a bridge loan with bad credit?
Bridge lending is asset-based, so credit matters less than on other products, but most sources still want 620 to 660 or higher. Below that, expect lower leverage and a higher rate rather than an automatic decline, and a strong exit becomes essential.
Is there a prepayment penalty on a bridge loan?
Usually no, or a short minimum interest period of three to six months. Confirm before closing, because a bridge you pay off in month two with a six month minimum costs more than one with a slightly higher rate and no minimum.
Can a bridge loan be used on a commercial property?
Yes, with the right capital source. Small multifamily, mixed use and some retail and office are common. Owner-occupied primary residences are not eligible for any business-purpose bridge loan.
What is the difference between a bridge loan and hard money?
In practice they are the same category: short-term, asset-based, business-purpose loans. Hard money is the older term and often implies a smaller private lender. Bridge is the term institutional capital sources use.
316 Capital is a private lending and capital advisory firm. We arrange business-purpose real estate financing through institutional capital partners; loans are not available for owner-occupied primary residences. Figures on this page are typical market ranges as of September 2026 and are not an offer or commitment. Every quote is transaction-specific and subject to underwriting. Contact info@316cap.com or +1 (617) 546-4817.