It is a much sought after bridge loan but is often elusive. A bridge loan with a loan to value ratio (LTV) of up to 80%! While some believe it is impossible, it is not.
The majority of bridge loans in the market today have a cap of 65% LTV. Some lenders will go as high as 75% but only on those cherry deals in prime markets. However, recently certain bridge lenders have had an epiphany of sorts.
With the large banks still vacant in the commercial real estate lending space, these large bridge lenders have begun to originate GSE backed takeouts of their own bridge loans. This has created a bridge to permanent loan scenario that is benefiting both the bridge lender and the borrowing consumer!
Bridge Loan to Permanent Loan
That aforementioned elusive 80% LTV target for a bridge loan can be achieved when a borrower guarantees the bridge lender that they will allow them to perform the commercial loan that will become the permanent take-out financing for their bridge loan.
This type of commitment from the borrowing consumer gives the commercial lender the confidence that they are in control and can take out their own loan, essentially paying themselves back without delay by the borrower. This allows borrowers to stretch their equity and get a great deal in the process!
Using bridge loans properly allow borrowers to make aggressive offers on stabilized properties and close fast! It also gives them the ability to buy distressed assets with less down-payment than they would have in traditional bridge loans. Lower down payments means they can now stretch their equity into more opportunities.
Using a bridge loan to perm loan strategy is good but throw in an 80% LTV on the front end of the process and it becomes a great strategy. Dividend America Commercial Lending is intimately familiar with this type of strategy and helps their borrowing customers achieve success on a daily basis.
Now lending in all 50 states with a specific focus on these cities: 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. Bridge loan to perm financing is the way to stretch your equity!