What Is a Multifamily Bridge Loan?
A multifamily bridge loan is a short-term financing option for acquiring and rehabbing properties like apartment buildings, condos, townhomes, and duplexes. It bridges the gap between immediate investment needs and long-term financing, helping investors act quickly when funds are tied up elsewhere.
The quick turnaround of the loan helps investors act on time-sensitive opportunities, such as property purchases, but it can also help in other situations. For example, the loan can help stabilize rental properties by providing funds for timely repairs and building upgrades. Investors can also use the loans to fund operational expenses during times of financial difficulty or tenant turnover.
Dominion Financial helps speed up the application and approval process. Its in-house underwriting team is an expert in real estate lending and investor-focused services. By handling things in-house, Dominion ensures fast closings and funding for your projects.
The Benefits of a Multifamily Bridge Loan
Bridge loans are excellent options for experienced real estate investors, especially those juggling multiple projects with limited access to capital. Several benefits make these loans attractive to the right investor:
Flexibility
Bridge loans are more flexible than conventional loans. You can customize the terms and conditions of the loan to suit your specific property characteristics and investment strategy. Dominion can work with you on loan amounts, interest rates, and repayment schedules. This loan can also be helpful if you plan to refinance, sell the property, or get another loan.
Fast Funding
Time is everything in the real estate market. Properties go on the market, and opportunities can vanish in a few days or weeks. Bridge loans have a reputation for speed. The Dominion team aims to close bridge loans within seven days. Consider filling out an application for pre-approval because it can speed the process along.
Leverage for Value-Add Projects
Bridge loans help investors acquire properties and repurpose and reposition them to increase marketability and value. These funds can also help with renovations and other property upgrades, which increase a property’s rent and improve consumer interest.
Multifamily bridge loans have value beyond acquisition, too. Experienced investors can use the funds for rehab projects and tenant stabilization.
How Multifamily Bridge Loans Work
Before applying for a multifamily bridge loan, you can get up to speed on the structure, eligibility requirements, and the application process to avoid setbacks or delays.
Loan Structure
A multifamily bridge loan is a short-term financing solution designed for the acquisition and rehab of properties like apartment buildings, condos, townhomes, and duplexes.
Dominion Financial’s multifamily bridge loans provide financing up to 85% Loan-to-Cost (LTC), covering both the purchase price and renovation expenses. We also consider the After Repair Value (ARV) to ensure your investment aligns with its post-renovation potential. Unlike traditional lenders, we do not require an appraisal, allowing for faster closings—often in as little as seven days.
Eligibility Criteria
Eligibility for a multifamily bridge loan can vary from lender to lender. Typically, Dominion Financial prefers to work with experienced real estate investors. For a multifamily property loan, the in-house underwriters like to see an applicant with experience in similar properties. Experience means fewer risks for the lender.
The borrower should also have a healthy credit rating. That said, Dominion is less interested in the FICO score and more interested in investment history and property value. The property value and your experience with similar deals, as well as the loan amount, hold a lot of weight in a loan decision.
Finally, to be eligible for a multifamily bridge loan, the property in question must be a multifamily property, such as an apartment building, townhouse, or condominium. Property size matters to some lenders, as does the occupancy rate.
Application Process
The application process for a bridge loan with Dominion is straightforward. Submit the initial documents, typically property details and a business plan, for pre-approval. Most applicants receive a pre-approval decision within 24-48 hours.
After you’re pre-approved, a loan agent will contact you about next steps. In some cases, applicants may need to provide further documentation about the property or their financials.
Finally, the in-house underwriters review the application and make a decision. Depending on the complexity of the loan, closing usually takes seven to ten days.
The Dominion Advantage
Dominion Financial Services has a proven track record in multifamily lending. With its integrated underwriting and closing processes, Dominion can help navigate your application for a multifamily bridge loan to avoid the numerous hurdles and complications of conventional loan programs.
The Dominion bridge loan program is flexible and well-suited for multifamily investment strategies. The absence of an appraisal requirement means you can save time and gain access to funds quickly for fast acquisitions.
Loan Product Overview
Ready to apply? If you’re still on the fence, consider the following loan details:
Loans up to $7.5 millionInterest rates starting at 8%Term lengths between 12 and 24 monthsClosing time between seven and ten days
Eligible properties include multifamily buildings with five or more units, mixed-use properties with a residential focus, and value-add opportunities.
Prepare for Your Loan Application
When applying for a multifamily bridge loan with Dominion Financial Services, you’ll need several documents, including:
Property address, purchase price, and estimated renovation costsFinancial statements and rent rollsBusiness plan outlining repositioning or exit strategy
It’s wise to organize your paperwork in a binder. Use dividers or color-coded tabs to mark different sections. For example, label one divider as “Property Information,” another as “Financials,” and the last one as “Business Plan.”
Your business plan should include information about property and project management. You want to show the loan officer you understand how to handle large-scale multifamily investments.
How to Get Started
To get the ball rolling, complete an online application, or contact a Dominion Financial representative. If a bridge loan doesn’t sound exactly right for your project, consider other programs, such as Rental or Fix-and-Flip loans.
About Dominion Financial Services
Dominion Financial Services is a private lender. Its mission is to empower real estate investors to achieve their goals by offering fast, flexible, and reliable funding solutions, such as a multifamily bridge loan. With a team of dedicated and experienced real estate and finance professionals, the lender aims to enable investors to capitalize on real estate opportunities. Contact a loan officer to inquire about available loan programs.
