Bridge Loan vs. Fix-and-Flip Loan: Which One Actually Fits Your Value-Add Deal
An investor calls us about a fully-tenanted single-family rental that needs new flooring and paint before refinancing. Another calls about a gutted duplex that needs a $120,000 rehab before it’s rentable at all. Both ask for “a hard money loan.” They need two different products, priced two different ways, and picking the wrong one either leaves money on the table or forces the investor to carry a rehab budget in cash that the loan should have covered.
Easy Lending USA offers business-purpose loans on non-owner-occupied investment property, and in licence-required states our partner lenders hold the licence. The figures below are indicative underwriting guidelines from our current bridge and fix-and-flip program sheets, not a committed quote on any specific deal.
What a bridge loan actually measures
A standard bridge loan on a 1-4 unit, multifamily, or mixed-use investment property is priced off loan-to-value (LTV) against the property’s current, as-is value — up to 75% LTV. There’s no rehab budget in the underwriting and no draw schedule. The lender is funding against what the property is worth today, not what it will be worth after work. That makes a bridge loan fast to close and simple to service, but it also means the loan amount doesn’t grow to cover a renovation.
A separate multifamily bridge program exists for 5+ unit and mixed-use value-add deals that do involve rehab: up to 75% loan-to-cost (LTC) and 65% after-repair value (ARV), with a 670 minimum FICO and draws released against completed work — underwriting that behaves much more like a fix-and-flip loan than like a single-family bridge. Conflating the two is the single most common mistake we see on multifamily files.
What a fix-and-flip loan actually measures
Fix-and-flip pricing starts from the deal’s total cost — purchase price plus rehab budget — not the as-is value. Current guidelines run up to 90% LTC for light rehab on an experienced borrower, 85% for some experience, and 80% for a new investor, capped at 75% of ARV, whichever is lower. The rehab portion is released in draws as work is verified, 620 minimum FICO (650 for new investors), loan sizes from $115,000 to $8 million, 12-18 month terms, and a 7-15 day close.
That LTC structure is what lets a fix-and-flip loan fund a rehab a bridge loan can’t reach: the loan amount is built around the project’s total cost, not frozen at today’s value.
The same deal, run both ways
Take a $400,000 purchase that needs a $120,000 gut rehab, with an ARV of $650,000 once finished — a realistic value-add single-family deal.
| Program | What it prices off | Indicative loan amount | Who funds the $120K rehab |
|---|---|---|---|
| Bridge (75% LTV, as-is) | $400,000 as-is value | $300,000 | Investor, in cash — no draw facility |
| Fix-and-flip (90% LTC / 75% ARV, lower governs) | $520,000 total cost vs. $650,000 ARV | $468,000 (90% × $520,000 = $468,000; 75% × $650,000 = $487,500 — LTC is the binding number) | Lender, released in draws against completed work |
Run through a bridge loan, this investor nets $300,000 and has to bring $220,000 in cash — the $100,000 gap to the purchase price plus the full $120,000 rehab — before touching a dollar of lender rehab funding, because there isn’t one. Run through a fix-and-flip loan, the same investor brings roughly $52,000 ($520,000 total cost minus the $468,000 loan) and the rehab is funded in draws as walls come down and go back up. The $168,000 difference is the cost of using the wrong loan type for a rehab-heavy deal, not a quirk of one lender’s pricing.
When a bridge loan is the wrong call
If the property needs real construction — a kitchen gut, a roof, a structural repair, anything that would normally draw against a budget — a bridge loan is the wrong tool. The as-is LTV cap doesn’t move to account for the work, there’s no draw mechanism to release rehab funds as the job progresses, and the investor ends up self-funding a renovation that a fix-and-flip loan is built to carry. We also see investors reach for bridge financing because the close is marginally simpler, then run short on cash mid-rehab because the loan never sized for the budget in the first place.
When a fix-and-flip loan is the wrong call
If the property is already rentable and the work is cosmetic — paint, flooring, appliances, a few thousand dollars of punch-list items — a fix-and-flip loan is overbuilt for the job. Draw inspections, a scope-of-work review, and a rehab holdback add time and fees for a project that doesn’t need a draw schedule at all. A bridge loan closes on the current value, skips the construction underwriting, and gets the investor to a refinance faster when the “rehab” is really just making a already-occupiable unit look better.
The quick test
- Is the loan amount supposed to cover construction costs, or just acquisition? If construction, that’s LTC territory — fix-and-flip or multifamily bridge, not standard bridge.
- Is there a draw schedule in the deal at all? No draws, no rehab budget in underwriting, means a standard bridge loan is probably sized too small for a true renovation.
- Is the property 5+ units or mixed-use with a real value-add component? That’s the multifamily bridge program (75% LTC/65% ARV, 670 FICO), not the 1-4 unit bridge or fix-and-flip tracks.
Either way, run the arithmetic on the specific purchase price, rehab budget, and ARV before assuming which program fits — the numbers, not the label on the loan, decide it. See current indicative terms on our rates page, or start an application and we’ll tell you which program the numbers actually support.