Multifamily Bridge Loans from $5M to $30M

A multifamily bridge loan is short-term debt on an apartment building that can't refinance into permanent financing yet. Northern Ridge Capital arranges multifamily bridge loans from $5M–$30M nationwide within our licensed footprint. We take your building to the bridge lenders, debt funds and private capital sources in our 700+ network that want that size and business plan, put their term sheets side by side, and close in 15 to 30 days on a lender-ready file. We're a broker, not a lender.

Who can help you get a bridge loan on an apartment building?

You can go to a direct bridge lender, which gives you one answer on its own money, or to a commercial mortgage broker, which takes the same file to many lenders at once. Northern Ridge Capital is a broker for apartment bridge loans of $5 million to $30 million. Each lender has its own box for leverage, recourse, market and renovation funding, and you only find out whether your building fits by asking. We ask the ones most likely to say yes, then negotiate rate, leverage, recourse, extensions and prepayment with term sheets in hand. We're paid through a 1% origination fee that's due only if the loan closes.

When owners use a multifamily bridge loan

Roughly half the apartment building loan calls we take are on buildings that will not qualify for permanent debt today. They usually fall into one of four situations.

Lease-up

A newer building that hasn't reached stabilized occupancy won't size for permanent debt off its rent roll. A bridge funds it on value, equity and a credible exit, and permanent debt takes it out once the income is documented.

Value-add and renovation

Unit upgrades, deferred maintenance, a repositioning. A bridge lender will fund the acquisition and the plan when the budget supports it, and the higher rents carry the refinance.

A loan maturing before the numbers work

Debt written at 3% to 4% now reprices at 6% to 7% or higher, so debt service nearly doubles on income that didn't. A full, well-run building can fall below the 1.20x to 1.25x coverage most banks require. A bridge pays off the maturing loan and buys time for the income to support permanent debt.

A purchase on a short clock

Some sellers will take certainty over price. A bridge lined up before you sign lets you offer a short close and keep it.

How lenders size a multifamily bridge loan

Bridge lenders start from the building's value and your cost, then work back from the exit. Leverage commonly runs 65% to 75% of value or cost, depending on the asset, your equity and the lender. Three things move the number.

• The as-is value and the renovation budget, which set the loan against value or cost.
• The exit. The lender wants to see the permanent loan that pays it off, so it tests stabilized income against the 1.20x to 1.25x coverage and the 8% to 10% debt yield floor that permanent lenders commonly use.
• Your liquidity and track record. Multifamily lenders look at post-close liquidity and at what you've done with similar buildings.

Illustrative only. At 65% to 75% of value, a building worth $8,000,000 supports roughly $5,200,000 to $6,000,000 of bridge debt. That's inside our range, and it's also the amount the permanent loan at the end has to cover, which is why the exit gets checked before anyone commits.

Typical multifamily bridge structure

Structure shown is typical, not a quote or commitment; actual terms are set by third-party lenders subject to underwriting. See disclosures.

The exit to permanent or agency debt

Plan the takeout before you sign the bridge. A permanent lender generally wants occupancy of 90% or better sustained for 90 days before it will size a loan off that income. It runs coverage, value and debt yield at once, and the lowest of the three sets the loan. The bridge term has to leave room to get there. Extensions are a backstop, and they cost money.

The sizing tests are worked through on apartment building loans, with the documents lenders expect. Agency, bank, CMBS and bridge debt are compared in the multifamily loans guide.

Multifamily bridge loans by state

Local costs change how a lender sizes the loan, so two states have their own page. Florida multifamily bridge loans covers insurance, which drives Florida underwriting. Texas multifamily bridge loans covers concessions and the property tax reset. For bridge debt on retail, industrial and other property types, see commercial bridge loans.

Multifamily bridge loans: FAQ

Who can help me get a bridge loan for an apartment building?

A direct bridge lender or a commercial mortgage broker. Northern Ridge Capital is a broker that arranges multifamily bridge loans from $5 million to $30 million. We take your file to the lenders in a network of 700+ that want it and close in 15 to 30 days on a lender-ready file.

How much can I borrow on a multifamily bridge loan?

Commonly 65% to 75% of value or cost, depending on the asset, your equity and the exit. On a building worth $8 million that's roughly $5.2 million to $6 million.

How fast can a multifamily bridge loan close?

Plan on 15 to 30 days once the file is lender-ready. Title, the appraisal and third-party reports are usually the last items in.

What does a bridge lender need to see?

A current rent roll, trailing 12 months of operating statements, the business plan and renovation budget, a current insurance quote, your real estate schedule and liquidity, and a credible exit.

What is the exit from a multifamily bridge loan?

Usually a refinance into agency, bank or other permanent debt once the building is stabilized, or a sale. Lenders want to see that plan before they commit.

What rate will I pay?

More than permanent debt, because the loan is short-term and underwritten on the asset. The commercial real estate rate report publishes current bridge bands off recent $5M+ closings. It's a range to calibrate against, not a quote.

Is Northern Ridge Capital a lender?

No. We're a commercial mortgage broker (CA DRE #02093377). We place your deal with the right lender from a network of 700+ (banks, debt funds, family offices, CMBS, hard money, and private capital) and make them compete. Commercial real estate only.

About

Justin Ashcraft is the president of Northern Ridge Capital, a commercial real estate debt brokerage placing $5M–$30M in multifamily, retail, and industrial financing nationwide within its licensed footprint, with $600M+ in deal experience across underwriting and brokerage. Licensed in California, DRE #02093377.

Northern Ridge Capital is a licensed commercial mortgage broker (CA DRE #02093377), not a lender, and arranges financing on commercial real estate only (no residential). Structures and figures shown are typical and are not an indication or offer of terms. For informational purposes only; not financial, legal, or tax advice. Full disclosures.