Bridge Loan and Permanent Financing – How does it work?
Bridge loan to perm financing was a huge strategy back in the heyday of commercial lending and the fast paced economy in the early 2000’s, however the economic collapse saw this lending strategy fade away. With a resurgence of capital in the commercial lending and multifamily residential finance arena.
A bridge loan can be used to close on a property quickly and take advantage of a distress seller situation or just to beat the competition. At the same time the commercial real estate investor can then take the time necessary to refinance into some other form of long-term financing that fits their need.
The best example of this is with FHA and Fannie Mae loans. These commercial loans and multifamily residential loans are some the most flexible senior debt instruments in the market today. With low interest rates and high LTV’s they are very attractive to borrowers. However, it can take up to 90 days, and in some cases longer, to fund through one of the GSE backed funding programs. The answer is a bridge loan to permanent financing.
The investor can use the bridge loan as a short-term financing to acquire the property and then can choose one of many senior debt instruments to complete the long-term financing. Whether it be a CMBS loan, Freddie or Fannie back paper or FHA/HUD type financing, time is no longer an issue giving the savvy commercial real estate investor an advantage over their competition.
With loan to value (LTV) ratios as high as 80% on the bridge loans, the investor does not have to worry about high leverage or cash out because these special bridge loans are structured to mirror the long-term financing that will ultimately act as the take-out loan. Contact us today to find out how our Bridge Loan to Perm financing can help you stretch your equity and do more deals!
Providing Bridge Loan to Perm Financing in all 50 states and focusing on the markets and submarkets listed in the S&P Case Shiller Home Price Index and the surrounding secondary markets to those cities. We look for opportunities in: Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, Fort Lauderdale, Orlando, San Diego, New York, San Francisco, Phoenix, Atlanta, Tampa Bay, Detroit, Minneapolis-Saint Paul, Charlotte, Dallas / Fort Worth, Portland, Seattle, Cleveland, Oklahoma City, Jacksonville, Indianapolis, Nashville, Kansas City, Louisville, Milwaukee, New Orleans, Philadelphia, Raleigh, Sacramento, Salt Lake City, San Antonio, San Jose, Saint Louis, Tucson, Austin, Baltimore.