What is a bridge loan in real estate?

A bridge loan is a short-term, interest-only loan secured by real estate that provides fast capital for time-sensitive investment deals. Bridge loans typically close in 3 to 14 business days, have terms of 6 to 24 months, and lend up to 70 to 75 percent of the property value. Qualification is asset-based — no W-2s or personal tax returns required.

How does a bridge loan get repaid?

A bridge loan is repaid through one of two defined exit strategies: selling the property or refinancing into a long-term loan such as a DSCR loan or conventional mortgage. Borrowers must have a clear exit strategy before taking on a bridge loan, as the short loan term — typically 6 to 24 months — means repayment is required relatively quickly.

What is the maximum loan-to-value for a bridge loan?

Most bridge loan programs lend up to 70 to 75 percent of the property's current or as-is value. For fix and flip bridge loans, lenders may lend up to 90 percent of the purchase price and 100 percent of rehab costs, as long as the total loan does not exceed 70 to 75 percent of the after-repair value. Loan amounts and LTV limits vary by lender and property type.

What credit score do I need for a bridge loan?

Most bridge loan programs require a minimum credit score of 620 to 660. Because bridge loans are asset-based and secured by real estate, credit score requirements are typically more flexible than conventional loans. Lenders focus primarily on the property value, the borrower's exit strategy, and the loan-to-value ratio rather than personal income or employment history.

When should an investor use a bridge loan instead of a DSCR loan?

Use a bridge loan when speed is essential and a deal cannot wait for standard underwriting, when a property needs rehabilitation before it can qualify for long-term financing, or when the property does not yet generate rental income. DSCR loans are better suited for stabilized rental properties with steady cash flow. A bridge loan is often the first step, with a DSCR loan as the refinance exit strategy.

Does Grafton Funding offer DSCR loans for rental properties?

Yes — DSCR (Debt Service Coverage Ratio) loans are our most popular product. We lend on single-family rentals, 2–4 unit properties, short-term rentals (like Airbnb and VRBO), and small multifamily up to 10 units. We qualify the property on its rental income rather than your personal income or tax returns. Minimum DSCR is typically 1.0x, and we lend in TX, FL, GA, NC, SC, and other states.

Does Grafton Funding do fix and flip loans or bridge loans?

Yes. We provide fix and flip loans and bridge loans for non-owner occupied investment properties. Our programs cover the purchase price plus rehab costs, with fast closings. Loan terms are short-term (typically 12–18 months) and are designed around the investor's exit strategy — either sale or refinance.

Can I get a DSCR loan for an Airbnb or short-term rental property?

Yes — we specialize in short-term rental (STR) financing. We use either the property's actual Airbnb or VRBO income history or a market-rate STR income estimate to qualify the loan. You don't need W-2s or tax returns.

Does Grafton Funding offer new construction loans for investment properties?

Yes. We offer new construction loans for non-owner occupied residential investment properties, including spec builds, ground-up construction, and lot + build projects. These are short-term loans that fund in draws as construction progresses.

Does Grafton Funding lend in North Carolina?

Yes — we actively lend in North Carolina, including the Charlotte metro, the Triangle (Raleigh/Durham/Chapel Hill), Wilmington, and Asheville. We offer DSCR rental loans, fix and flip loans, and new construction financing for NC investment properties. Local NC line: (910) 218-1286.

Can I qualify for a loan without showing tax returns or personal income?

Yes — our DSCR loans are underwritten based on the property's rental income, not your personal income or tax returns. This makes them ideal for self-employed investors and business owners. We do require a credit check and down payment, but there's no traditional income verification.

What credit score do I need to get a loan from Grafton Funding?

For most DSCR rental loan programs, we generally look for a minimum credit score in the 660–680 range, though this can vary by program and loan-to-value. Fix and flip loans may have different requirements depending on experience and deal strength.

How much do I need to put down for a DSCR loan?

For DSCR rental loans, we typically lend up to 75–80% loan-to-value (LTV), meaning you'd need 20–25% as a down payment. The exact LTV depends on the property type, DSCR ratio, and your credit profile. We lend exclusively on non-owner occupied investment real estate.

How quickly can Grafton Funding close a loan?

Many of our transactions close in 2–4 weeks depending on the loan type, property, and how quickly documentation is provided. We prioritize responsive communication and efficient underwriting for investors who need to move fast on deals.

Does Grafton Funding work with first-time real estate investors?

Yes — we work with both new and experienced investors. For DSCR rental loans, first-time investors are welcome as long as the property cash flows and the borrower meets our credit and down payment requirements. For fix and flip loans, some experience is preferred but not always required.

Bridge Loans for Real Estate Investors: A Complete Guide

May 26
4 min read

In real estate investing, timing matters.

The right deal doesn't wait 45 days for a conventional underwriting process.

A bridge loan is designed for exactly these moments — fast capital, flexible terms, asset-based qualification.

Quick Answer: A bridge loan is short-term, interest-only financing secured by real estate that closes in 3–14 business days. Loan terms are typically 6–24 months, with most programs lending up to 70–75% LTV. Qualification is asset-based — no W-2s or tax returns required. The loan is repaid through sale or refinance at the end of the term.

What Is a Bridge Loan?

A bridge loan 'bridges the gap' between an immediate financing need and a longer-term solution.

The exit is always defined upfront:

Sale of the property
Refinance into a DSCR or permanent loan

Because bridge loans are asset-based, approval focuses on the property's value and the exit strategy — not your personal income.

Explore our bridge loan programs and current structures.

When Investors Use Bridge Loans

1️⃣ Time-sensitive acquisitions — close in 3–14 days to compete with cash buyers

2️⃣ Value-add and stabilization — finance a property during renovation before DSCR qualification

3️⃣ Buying before selling — acquire a new property before an existing sale closes

4️⃣ Distressed property acquisitions — properties that won't qualify for conventional financing yet

5️⃣ Construction-to-permanent gap — newly built rentals that need 6–12 months of lease-up before DSCR refinance

Fix and flip investors also commonly pair bridge loans with dedicated renovation financing programs.

Bridge Loan Terms and Structure

Term

Typically 6–24 months. 12 months is most common.

Payments

Interest-only. You pay interest on the outstanding balance; the principal is repaid at maturity through sale or refi.

LTV

Most programs lend up to 60–75% of the as-is value. Some lenders use ARV for properties with a renovation component.

Rate

Typically 9–13%, reflecting the short-term, flexible nature of bridge financing.

Points

1.5–3 points origination. Standard for short-term lending.

Speed

Most experienced bridge lenders close in 3–14 business days. Some as fast as 3–5 days for straightforward deals.

Need to Close Quickly on a Property?

Review bridge loan programs for short-term, asset-based investment financing.

View Bridge Loan Programs

Bridge Loan Requirements

Credit Score

600–640 minimum for most programs. Higher scores improve rate and terms.

Property Value / Exit Strategy

The primary qualification factor. Lenders need a clear, credible exit — sale or refinance.

Reserves

6–12 months of interest and carrying costs in liquid assets.

Income Documentation

Not required. Bridge loans are asset-based — qualification is based on the deal, not your income.

Bridge Loan Exit Strategies

Every bridge loan needs a defined exit — the plan for repaying the loan at maturity.

Sale

The property is sold before or at loan maturity, with proceeds repaying the bridge. Common for fix & flip and land development projects.

Refinance into Permanent Financing

The property is stabilized — renovated, leased, or seasoned — then refinanced into a DSCR or conventional loan. Common for buy-and-hold investors using bridge as interim financing.

A credible, documented exit strategy is essential for approval. Lenders evaluate whether your exit is realistic within the loan term.

Bridge Loans vs. Hard Money: What's the Difference?

These terms overlap significantly and are often used interchangeably.

In practice:

Hard money — typically associated with higher rates, private lenders, distressed properties
Bridge loan — broader term for any short-term gap financing

The key questions are always the same: What is the LTV? What is the rate? What are the points? What is the exit?

For properties with a renovation plan, also review how fix & flip loans are structured.

When Bridge Loans Make Sense — and When They Don't

Bridge loans are ideal when:

✔ You need to close faster than conventional financing allows

✔ The property needs work before qualifying for long-term financing

✔ You're buying before a current property sale closes

✔ The property doesn't qualify for conventional financing yet

Bridge loans are not ideal for:

✖ Long-term buy-and-hold without a clear refi plan

✖ Properties with no clear exit strategy

✖ Borrowers who can't service interest during the hold

Bottom Line

Bridge loans are the right tool when timing, property condition, or deal structure makes conventional financing impractical.

Close in 3–14days
6–24 month terms, interest-only
70–75% LTV, asset-based
No W-2s or tax returns required
Exit into sale or DSCR refinance

Frequently Asked Questions

What is the typical term for a bridge loan?

Most real estate bridge loans are structured for 6 to 24 months, with 12 months being most common. Extensions are typically available for 1–3 months at a fee of 0.5–2.5% per extension if needed to execute the exit strategy.

How fast can a bridge loan close?

Most bridge lenders close in 3–14 business days. For straightforward deals with complete documentation, some lenders can close in 3–5 days. This speed advantage is one of the primary reasons investors use bridge loans over conventional financing.

Do I need income verification for a bridge loan?

No. Bridge loans are asset-based — qualification focuses on the property's value and your exit strategy. Personal income, W-2s, and tax returns are generally not required. The deal's merit and the borrower's ability to execute the exit are the primary evaluation factors.

What LTV can I get on a bridge loan?

Most bridge lenders advance 70–75% of the property's as-is value. Some lenders go up to 75–80% of ARV for properties with a renovation plan. The LTV determines your required equity — either as a down payment on an acquisition or from existing equity on a refinance.

Can I use a bridge loan to buy a property before selling my current one?

Yes. Bridge loans are frequently used to close on a new acquisition before an existing property sale closes. The bridge is repaid from sale proceeds. This strategy lets investors move on a deal without waiting for their exit to complete.