Bridge loans come from three distinct places: regional and community banks and credit unions, non-bank specialty finance companies, and private money lenders. Which banks do bridge loans in practice tends to be the smaller regional and community institutions along with credit unions, since most large national banks have pulled back from marketing standalone bridge products. Banner Bank, for example, offers a residential bridge loan that lets borrowers tap up to 80% of their current home’s equity with interest-only payments for up to 12 months. For commercial deals, investment properties, or anything that needs to close in days, the lender is almost always going to be a non-bank or a private fund rather than a bank.
The right choice depends on what you’re financing, how fast you need the money, and how your credit and collateral look. Each lender type sits at a different point on the tradeoff between cost and speed.
Banks and Credit Unions That Offer Bridge Loans
Banks and credit unions focus almost exclusively on residential bridge loans for homeowners buying a new property before selling an existing one. They offer the lowest rates in the market, but underwriting is slower and more conservative. Expect thorough income verification, strong credit requirements, and little appetite for commercial properties or unusual collateral.
Most banks that write these loans want you to hold your primary mortgage with them, or to open one as part of the bridge transaction. That requirement alone rules out a lot of borrowers who assumed they could shop a bridge loan independently of their main mortgage relationship.
Larger national banks have largely stepped away from marketing standalone bridge products, so the practical universe of bank bridge lenders is regional banks, community banks, and credit unions. Banner Bank’s residential bridge product, mentioned above, is a representative example: up to 80% of current home equity, interest-only payments, a 12-month term. Terms at other regional banks and credit unions vary, but the structure is similar.
If your situation fits what banks like to see — strong credit, a conforming residential deal, time to go through a 30- to 60-day underwriting cycle — this is where you’ll get the best rate.
Non-Bank Specialty Lenders
Non-bank lenders dominate commercial bridge financing. Companies like Kiavi, Ready Capital, and iBorrow specialize in loans for investment properties, renovations, and commercial acquisitions that a traditional bank would pass on.
These lenders underwrite deals based heavily on the collateral’s value and your exit strategy, not just your personal income history. That makes them accessible to real estate investors, self-employed borrowers, and anyone whose tax returns don’t tell the full story of their finances. Closing timelines are compressed too, often two to four weeks compared to a bank’s 30 to 60 days.
The tradeoff is price. Rates and fees run higher than bank bridge loans, sometimes meaningfully so. For borrowers who need speed or who are buying property types banks won’t touch, that premium is simply the cost of getting the deal done.
Private Money Lenders and Investment Funds
Private money lenders — high-net-worth individuals, family offices, and institutional debt funds — handle the most specialized bridge scenarios. If the deal involves a distressed property, non-traditional collateral, or a closing deadline measured in days rather than weeks, private capital is often the only option on the table.
These lenders move faster than anyone else and impose fewer bureaucratic hurdles. They also charge the highest rates and fees in the market. Loan documents from private lenders are less standardized than what you’ll see from banks or specialty finance companies, which means default triggers, extension provisions, and fee structures vary a lot from one deal to the next. Read every term carefully. The flexibility that makes a private bridge loan possible is the same flexibility that lets a lender write terms in their favor.
How Rates and Fees Compare Across Lender Types
Bridge loan rates currently range from roughly 7% to 12%, depending on the lender type, the collateral quality, and your credit profile. Bank-originated residential bridge loans sit at the lower end. Private money and high-leverage commercial deals push toward or beyond the upper end. Non-bank specialty lenders fall somewhere in between.
Most bridge loans use an interest-only payment structure for the full term, with the entire principal due as a balloon payment at maturity. That keeps monthly cash flow manageable but concentrates the repayment risk at one date.
Origination fees run 1% to 3% of the loan amount, paid at closing. On top of that, expect to pay for an independent appraisal, title work, and attorney fees for document preparation. On a $300,000 bridge loan with a 2% origination fee and 9% interest over eight months, the origination alone costs $6,000 before you account for monthly interest payments of roughly $2,250.
Two fees to look for in the loan documents before you sign:
- Extension fees. If your exit plan stalls and you need more time, most lenders will extend the maturity date for a price. The amount is negotiated in the original documents, so you want to know it going in rather than under pressure later.
- Prepayment penalties. These are less common on bridge loans than on conventional mortgages, and many bridge lenders don’t charge them. Some impose an early payoff fee of 1% to 2% of the remaining balance. A prepayment penalty on a loan designed for early repayment is worth questioning.
What Each Lender Will Want From You
Bridge loans are asset-backed first and borrower-credit second. The collateral drives the deal more than your income statement does, though every lender still cares whether you can cover monthly interest during the term.
Collateral and Loan-to-Value
The property securing the loan must be professionally appraised, and the lender advances only a percentage of that appraised value. Commercial bridge lenders set loan-to-value between about 65% and 80%, so a property appraised at $1 million supports a loan of $650,000 to $800,000. Residential bridge loans follow a similar framework, with some banks lending up to 80% of the current home’s value minus the existing mortgage balance.
Credit Score
Minimums vary significantly by lender type. Many non-bank and hard-money lenders accept scores as low as 620 to 650, compensating for the added risk with higher rates. Traditional banks and credit unions tend to look for 680 or above. Expect any lender to pull tax returns, bank statements, and financial statements to confirm you have enough liquidity to cover interest payments through the term without relying entirely on the exit event closing on schedule.
Exit Strategy
This is where applications succeed or fail. Every bridge lender requires a documented plan explaining exactly how you’ll repay the principal. For a home sale, that means showing the property is listed, providing a broker’s price opinion, or ideally presenting a signed purchase agreement. For a refinance, the lender wants projections showing the property will qualify for permanent financing at maturity, along with a pre-qualification or commitment from the takeout lender. Vague exit documentation sinks applications regardless of how strong the collateral looks.
Protections You Don’t Get With a Bridge Loan
Bridge loans sit in a regulatory gap most borrowers don’t anticipate. Several consumer protection rules that apply to conventional mortgages explicitly exclude bridge financing, and that affects how you should shop.
Federal law exempts bridge loans from the Real Estate Settlement Procedures Act, which normally requires standardized cost disclosures on residential mortgages. The regulation classifies a bridge loan secured by one- to four-family residential property as “temporary financing” and excludes it from coverage entirely.1Consumer Financial Protection Bureau. Coverage of RESPA – 1024.5 You will not automatically receive the Loan Estimate and Closing Disclosure forms that help borrowers comparison-shop on conventional mortgages.
Federal lending rules also exempt bridge loans with terms of 12 months or less from the ability-to-repay requirements that apply to higher-priced mortgage loans. Those rules normally require a lender to verify you can afford the payments before funding the loan; for a qualifying bridge loan, that verification is not legally required.2Consumer Financial Protection Bureau. Minimum Standards for Transactions Secured by a Dwelling – 1026.43 The same exemption applies to special appraisal requirements for higher-priced loans, which gives the lender more discretion over how the property is valued.3eCFR. Part 226 Truth in Lending (Regulation Z)
The practical takeaway: compare offers from multiple lenders yourself, request itemized fee breakdowns from each, and read the documents instead of assuming standard disclosures are working in the background. They aren’t.
Picking the Right Lender for Your Situation
Match the lender to the deal rather than shopping by rate alone.
If you’re a homeowner with strong credit buying a new primary residence before selling the existing one, and you have four to eight weeks to close, start with regional banks and credit unions. Call your existing mortgage holder first, since some banks will only write a bridge loan to customers who already have or will open a primary mortgage with them. This is where the rate advantage lives.
If you’re buying an investment property, financing a renovation, or doing a commercial acquisition, banks are rarely the answer. Non-bank specialty finance companies like Kiavi, Ready Capital, or iBorrow are built for these deals, will underwrite based on the collateral and exit, and can close in two to four weeks.
If the deal is distressed, the collateral is unusual, or you need to close in days, private money is the realistic option. Expect the highest rates and the least standardized documents, and have an attorney review the loan agreement before you sign.
Across all three categories, bring your exit strategy documentation to the first conversation. It’s the single thing that most determines whether a lender will take you seriously and how fast they can move.