What is a bridge loan, and how does it work?
A bridge loan is a short-term loan secured by real estate that funds a purchase or pays off a maturing loan now, and is repaid in one payment at a planned exit, usually the sale or refinance of the property.
A bridge loan is short-term financing secured by real estate that carries a borrower from the position they hold now — a purchase that will not wait, a loan coming due, a property mid-repositioning — to the exit that pays it off, normally a sale or a permanent refinance. Payments are normally interest-only during the term, and the principal is repaid in one payment at the exit. It is sized against the property's value rather than the borrower's income, and is also called a swing loan or a gap loan.
NexWin Capital Corp. arranges bridge loans on California investment property, placing each file with the private lender whose terms fit the asset and the exit. It is a licensed California mortgage broker rather than a lender, so the rate comes from the lender, on a term sheet written against your deal.
How a bridge loan works.
Four mechanics carry almost every one of them.
- 01
It is sized on the property
Leverage is set by the loan-to-value ratio, which the CFPB defines as a measure comparing the amount you are financing with the appraised value of the property. On a bridge, that value is the as-is value today.
- 02
Interest-only while it runs
The CFPB describes an interest-only loan as one whose payments cover only the interest for a set time, noting that the amount you owe does not go down with each payment. On most bridges that is the design, not a catch.
- 03
The principal comes back at the exit
Nothing amortizes, so the balance falls due at the end, in what the CFPB calls a balloon payment: a large, one-time payment at the end of the loan term. The exit that makes it is a sale, a refinance or a stabilization.
- 04
It is measured in months
Bridge terms are counted in months, not decades; the program NexWin Capital Corp. arranges is published at 6 – 24 mo. Most carry a right to extend for a fee if the exit slips, and some a minimum interest period before early repayment.
A worked example of the leverage, from the bridge program’s own published terms: $2M property at 70% LTV = up to $1.4M bridge loan. Whichever constraint is tightest binds, so a published ceiling is a ceiling rather than a starting point.
The bridge loan definition, and its other names.
That one-sentence definition covers the whole instrument; the names are where it gets confusing. The instrument has more names than it has forms. A swing loan is the same loan under a different label, used most often on residential deals. Fannie Mae’s Selling Guide writes the pair as a bridge (or swing) loan and accepts it as a source of funds on conditions: it cannot be cross-collateralized against the new property, and the lender must document that the borrower can carry both homes, the bridge and their other obligations at once.
Gap loan and interim financing are the same idea in looser language. Transitional loan is the informal name for the wider category — the residential transition loan, which holds both the purchase-and-rehab loan and the bridge. Each of these terms has its own glossary entry.
The federal rulebook uses two of the words in one breath. Regulation X, which implements RESPA, excludes from coverage “a ‘bridge loan’ or ‘swing loan’ in which a lender takes a security interest in otherwise covered 1- to 4-family residential property”.
Bridge loan vs. hard money loan vs. HELOC, at a glance.
| Bridge loan | Hard money loan | HELOC | |
|---|---|---|---|
| What it is | Short-term capital that carries a property from now to a planned exit | Private, asset-based capital secured by the property | A revolving credit line against equity in a home you already own |
| Collateral basis | The property's as-is value | The property; on rehab deals, its after-repair value | Your home equity |
| Underwriting focus | The exit: the sale or refinance that repays it | The asset and the plan, more than the borrower's income | Personal income, credit and debt ratios |
| Repayment shape | Interest-only during the term, principal at the exit | Interest-only during the term, principal at the exit | Draws first, then an amortizing payoff period |
| Published term band | 6 – 24 mo | Set per deal on the term sheet | Years, lender-dependent |
| Leverage ceiling | Up to 75% | Set per deal on the term sheet | Set by the bank against your equity |
| Regulatory frame | For business-purpose deals like these: generally exempt from Regulation Z | For business-purpose deals like these: generally exempt from Regulation Z | Consumer credit under Regulation Z |
NexWin Capital Corp. arranges business-purpose bridge and hard money loans through licensed lending partners; a HELOC is a consumer product it does not arrange, shown here for orientation only. The bridge column’s bands are that program’s published ranges, not an offer, and every deal is priced by its own term sheet.
Where a bridge loan helps, and where it hurts.
What it buys you
- Speed and certainty on a deadline a bank timeline cannot hit — typically the whole reason the loan exists.
- Time between positions: close the purchase now, sell or refinance on your schedule instead of a seller’s.
- Underwriting on the property and the exit rather than tax returns and employment history.
- Interest-only payments keep the carry down while the plan runs; principal waits for the exit.
What it costs you
- A higher price than permanent financing — the premium is what speed and certainty cost, and it is priced per deal on the term sheet.
- A short runway: if the sale or refinance slips, you are negotiating an extension, not waiting one out — and since 2025, California law is explicit that a broker-arranged extension stays inside the usury exemption (the statute, quoted).
- One balloon payment at the end — the exit has to be real, funded and on time.
- Points and fees are paid once over a short hold, which raises the effective annual cost — the bridge loan calculator shows that arithmetic on your own numbers.
When a real estate investor reaches for one.
Three situations account for most of them.
Buying before selling
The oldest use. On investment property the shape is identical, with a rental or a resale on both ends instead of a residence.
Closing inside a deadline
A purchase with a date on it, or a maturing loan that will not wait for a bank credit committee. The bridge buys the time.
Carrying an asset until it qualifies
A building mid-lease-up or mid-renovation does not yet show the income a permanent lender wants to see. A bridge holds it until it does.
The first is the one the regulator itself describes: Regulation Z’s ability-to-repay rules carve out “a temporary or ‘bridge’ loan with a term of 12 months or less, such as a loan to finance the purchase of a new dwelling where the consumer plans to sell a current dwelling within 12 months”. The third often exits into a DSCR loan once the rent covers the note.
The honest counter-case, published on this firm’s own bridge page: an existing line you can draw tomorrow beats any bridge loan. A bridge is for when the equity is real and the deadline is.
What a lender looks at, and what it costs.
Two questions carry a bridge file, in this order: what the property is worth now, and what specifically repays the loan. The second decides files. An exit that is real — a listing, a payoff, a refinance the numbers support — is underwritten first, because on an interest-only loan the exit is the repayment. The sponsor and the entity come third, usually shaping leverage and price more than the yes or no — which stays the lender’s call.
Cost is described in words here, because this site publishes no rate. Bridge capital is priced higher than a 30-year loan because it is shorter and assumes transition risk; in exchange you get speed, flexibility, and structures that can handle a value-add business plan.
Six lines usually decide a bridge term sheet: loan amount, rate, points, term, extension terms, and prepay. Read them together — a lower rate with a minimum interest period can cost more than a higher one you can retire the week the sale closes. Once a lender has quoted you, the bridge loan calculator turns that rate into a monthly carry, a total cost of capital, and the cash you need at close.
The bridge program NexWin Capital Corp. arranges.
One program, four published bounds, read from the same data the program page renders.
- Loan size
- $250K – $20M
- Term
- 6 – 24 mo
- Max loan to value
- Up to 75%
- Typical close
- ~14 business days
Every deal is priced to the scenario, so these are typical ranges rather than an offer. The close figure is typical for qualified scenarios with a complete file, and no date is quoted until the scenario has been read.
The full bridge terms carry the process, the document list and the representative deal; residential transition loans places the bridge inside its category; and hard money lenders in California explains who writes this paper here. City pages cover Los Angeles, Irvine and Newport Beach.
Business purpose, and the rules that follow from it.
Most investor bridge loans are written for business purpose, and that single fact decides which rulebook applies. Regulation Z exempts “an extension of credit primarily for a business, commercial or agricultural purpose”, and credit extended to other than a natural person. Regulation X carries the same exemption into RESPA and, separately, excludes bridge and swing loans secured by 1- to 4-family residential property.
The CFPB’s official interpretations go further on rentals: credit to acquire, improve or maintain rental property that is not owner-occupied is deemed to be for business purposes, regardless of the number of housing units, unless the owner expects to occupy it more than fourteen days a year.
In practice, that is why an investor bridge loan does not arrive with a Loan Estimate and a Closing Disclosure, and why the equity and the exit carry the underwriting instead of a debt-to-income calculation. Whether a specific loan is business-purpose is decided on the file by the lender and its counsel. NexWin Capital Corp. is licensed in California under the California Financing Law, administered by the DFPI, as License No. 60DBO-211586, with a public record on NMLS Consumer Access under NMLS ID 2743839; the disclosures carry the rest.
Sources: the CFPB on interest-only loans, balloon payments and the loan-to-value ratio; Regulation X §1024.5, Regulation Z §1026.3 with its official interpretations, and Regulation Z §1026.43; and the Fannie Mae Selling Guide B3-4.3-14 on bridge and swing loans.
Bridge loan questions, answered.
How is a bridge loan repaid?
In two parts. Payments during the term are interest-only, so the balance does not fall — as the CFPB puts it, the amount you owe does not go down with each payment. The principal is then repaid at the exit in one payment, what the CFPB calls a balloon payment. The exit is a sale, a refinance or a stabilization, and it is named before the loan is written.
Is a swing loan the same as a bridge loan?
Yes. Swing loan is another name for a bridge loan, used most often on residential deals: short-term capital secured by the property that carries you from one position to the next. Someone buying before their current home sells is asking for a swing loan whether or not they use the word. Fannie Mae writes it as a bridge (or swing) loan, and Regulation X names both terms in the same exclusion.
How long does a bridge loan last?
Months rather than years. The bridge program NexWin Capital Corp. arranges is published at 6 – 24 mo, and this page does not publish other lenders' numbers. Most bridges carry a right to extend for a fee if the exit slips, which is worth negotiating at term-sheet stage rather than in month eleven.
How much can you borrow against a property with a bridge loan?
It is sized on the property, through the loan-to-value ratio — the CFPB defines that as a measure comparing the amount you are financing with the appraised value of the property. On a bridge, that value is the as-is value today. The program NexWin Capital Corp. arranges is published at up to 75% of value, with loan sizes of $250K – $20M. The published terms put the arithmetic this way: $2M property at 70% LTV = up to $1.4M bridge loan.
How fast can a bridge loan close?
Typically faster than a bank loan, because the file is carried by the property and the exit rather than by income documentation. The bridge program NexWin Capital Corp. arranges publishes a typical close of ~14 business days for qualified scenarios with a complete file, sometimes faster and sometimes slower depending on title and appraisal. No date is quoted until the scenario is reviewed.
Is this page an offer of credit?
No. The figures above are one program's published ranges, not an offer, quote, pre-approval or commitment to lend, and every deal is underwritten on its own facts. NexWin Capital Corp. arranges financing through third-party lenders and does not set rate or terms. Nothing here is legal or tax advice.