Arizona Bridge Loan Program

Last Updated: April 18, 2025

At OfferMarket, our mission is to help you build wealth through strategic real estate investments in Arizona. We’ve developed a fully integrated platform that equips you with everything you need along your investment journey, including:

• Private capital lending
• Insurance rate comparisons
• Exclusive access to off-market Arizona properties

Our Arizona Bridge Loan Program is engineered to deliver fast, dependable, and competitively priced financing, empowering you to acquire and upgrade 1‑4 unit residential investment properties throughout the Grand Canyon State. Whether you plan to flip a property quickly for profit or convert it into a rental asset with a DSCR refinance, we’re dedicated to partnering with you for lasting success.

What Is a Bridge Loan in Arizona?

A bridge loan offers short-term, interim financing designed to “bridge” the gap until a more permanent funding solution is secured. In the Arizona market, these loans are especially beneficial when used in scenarios such as:

• Acquisition & Rehabilitation: Purchase a distressed or outdated property and renovate it while keeping cash available for future opportunities.

• Cash Purchase Refinance: Secure a property with a cash offer (often necessary for rapid closings) and then refinance to unlock equity for property improvements.

• Loan Replacement: Replace an existing loan on a property that still needs work, providing extra time and funds for renovations.

• As‑Is Purchases: Acquire properties under market value without planned upgrades—intending to resell “as‑is” for a profit.

• Equity Extraction: Refinance a cash purchase without any planned renovations, leveraging existing equity for your next Arizona project.

• Extended Rehab Financing: Refinance an existing bridge loan after major renovations are completed, giving you extra time either to sell or convert to long‑term rental financing.

Often referred to as “hard money” or “fix and flip” loans, these flexible financing options are widely embraced by Arizona real estate investors.

How It Works

An Arizona bridge loan is typically divided into two key components:

Initial Advance

This portion is applied directly to the purchase price and is wired to the title company at closing.

Construction Holdback

Reserved exclusively for renovation expenses, these funds are disbursed incrementally as you meet predetermined draw requirements.

Our design prioritizes flexibility. You may choose to receive both components to maximize your leverage or opt solely for the initial advance if you intend to finance repairs out-of-pocket. Many experienced investors in Arizona use a combination of both, while others—especially those handling cash deals—utilize only the holdback for essential improvements.

Your exit strategy remains flexible. You might opt to sell the property immediately after renovations or convert it into a rental and pursue a DSCR refinance. And if market dynamics shift, you can seamlessly transition—from a BRRRR (Buy, Rehab, Rent, Refinance, Repeat) model to selling outright if resale valuations appear particularly attractive.

Who Leverages Arizona Bridge Loans?

• Fix and Flip Investors: Those looking to purchase, renovate, and rapidly sell properties for profit.

• Rental Investors Using the BRRRR Strategy: Investors acquiring properties, updating them, renting them out, and then refinancing to release capital.

Many investors in Arizona blend these strategies—flipping some properties while keeping others as long‑term rentals to take advantage of evolving market conditions.

Program Guidelines

Project Eligibility

At OfferMarket, your success and the security of your investment are our top priorities. With fewer than 0.5% of our loans ever in default, we work closely with you to maintain this standard by emphasizing responsible lending practices.

High‑risk projects—typically those that require extensive or intricate rehabilitations—naturally face higher chances of delays, cost overruns, and unforeseen market shifts. These challenges are especially pertinent in Arizona’s varied markets, where regional weather and local regulations can add complexity. We function not only as your lender but also as your trusted advisor and risk manager, setting realistic expectations at every step.

Initial Advance

The initial advance is based on both your experience and the particulars of your project. Key factors include:

• The number of investment properties you have managed over the past 24 months.

• The number of verifiable rehab projects completed in the last 5 years.

• A minimum credit score of 680, with a strong preference for 720+.

• Professional credentials (for instance, if you’re a licensed Realtor, General Contractor, or Professional Engineer).

If the purchase price surpasses the “as‑is” value determined by our appraisal (or in‑house valuation), the advance is capped at that lower value. Your exit strategy is also evaluated: for properties slated for sale, we generally require a projected gross margin of at least 30% and a minimum profit of $15,000. For rental conversions or refinance scenarios, a post‑rehab DSCR of at least 1.1 is needed. Properties in rural parts of Arizona might face additional experience prerequisites and a reduced initial advance.

Experience-Based Tiers

We use a tier system to assess your experience based on verifiable project history:

Initial Advance by Tier

Adjustments to the Initial Advance

Specific risk factors may necessitate adjustments:

Rehab Scope Classification & Eligibility

Definition of Rehab Scope

• Light Rehab: Renovation costs are less than 25% of the purchase price.

• Moderate Rehab: Costs range from 25% to 49.99% of the purchase price.

• Heavy Rehab: Costs range from 50% to 99.99% of the purchase price.

• Extensive Rehab: Costs equal or exceed 100% of the purchase price, often involving additions, expansions, or “lopsided deals” with a low purchase price.

Eligibility Based on Rehab Scope

LTARV Limits (Loan-to-After-Repair Value)

LTFC Limits (Loan-to-Full-Cost)

For projects where the rehab budget exceeds the purchase price or “as‑is” value (Extensive Rehab), we use the Loan-to-Full‑Cost (LTFC) metric. For example, an LTFC of 85% implies that we fund 85% of the total project cost, leaving you to cover the remaining 15%.

Practical Examples

Example: No Experience
Purchase Price: $200,000
Tier: 1 (no verified projects)
Credit Score: 695
Rehab Budget: $48,000
ARV: $300,000
Initial Advance: $150,000 (75% of purchase price)
Construction Holdback: $48,000
Total Loan Amount: $198,000
LTARV: ~66%
LTFC: ~80%
Interest Accrual: Full accrual

Example: No Experience, Excellent Credit
Purchase Price: $200,000
Tier: 1
Credit Score: 750
Rehab Budget: $48,000
ARV: $300,000
Initial Advance: $160,000 (80% of purchase price)
Construction Holdback: $48,000
Total Loan Amount: $208,000
LTARV: ~69.3%
LTFC: ~83.9%
Interest Accrual: As funds are disbursed

Example: With 5 Verified Projects
Purchase Price: $200,000
Tier: 4 (5 projects)
Credit Score: 750
Rehab Budget: $40,000
ARV: $300,000
Initial Advance: $180,000 (90% of purchase price)
Construction Holdback: $40,000
Total Loan Amount: $220,000
LTARV: ~73.3%
LTFC: ~91.7%
Interest Accrual: As funds are disbursed

Refinancing Using “As Is” Value Instead of Cost Basis

Our standard underwriting is based on your cost basis (the purchase price plus sunk costs) to ensure you maintain skin in the game. However, if you own a well-established Arizona property with an “as‑is” value that exceeds your cost basis—and you require financing for renovations—we may consider leveraging that higher value. Requirements include:

• The property must be habitable (at least in C4 condition) with no major structural or safety concerns.
• You must have owned the property for a minimum of three years.
• If paying off an existing loan, the lender cannot be a bridge or construction lender, and there should be no default interest, late fees, or extension charges.
• A minimum credit score of 680 is required.
• You should be in Experience Tier 3 or above, meaning you have completed at least four similar, verifiable rehab projects.
• You must present clear evidence (supported by recent local comparable sales) that the property’s current “as‑is” value exceeds your investment.
• The overall scenario must be logical—for example, if you rented the property and now plan to renovate and sell after tenants have moved out.

Transactions Involving Wholesalers and Price Increases

If you acquire a property through a wholesaler, any assignment fee or double‑close price bump may be financed—as long as it does not exceed 20% of the wholesaler’s original purchase price. Amounts above that threshold must be covered out-of-pocket. For instance:

• A‑B Contract (from owner/wholesaler): $200,000

• B‑C Contract (assignment fee): $40,000

• As Is Value: $240,000

• Value Basis for Initial Advance: $230,000

Guidelines for wholesaler transactions include:
• Assignment fees or price escalations are financed up to 20% of the purchase price.
• All transactions must be conducted at arm’s length, with complete contract documentation.
• Finder or referral fees are not eligible for financing.

Construction Holdback

The construction holdback funds are made available to you based on draw requests tied to verified progress on your renovation. If you prefer to self‑fund the repairs, you can opt out of the construction holdback entirely.

Notably, for loans of $100,000 or more, any undrawn funds will not accrue interest (“as disbursed” method).

Draw Guidelines

Appraisal & Valuation Requirements

A valuation is mandatory for all OfferMarket bridge loans. Based on the specifics of your deal, we may require a third-party interior appraisal, a third-party exterior appraisal, or an in-house valuation.

In‑House Valuation Guidelines

If you meet certain criteria, you may opt for an in‑house valuation instead of a third‑party appraisal. To qualify, all of the following must apply:

• Property Type: Single‑family, duplex, triplex, or fourplex.

• Experience Tier: Tier 4 or above.

• Minimum Credit Score: 720.

• Rural Location: Not permitted.

• New Market Entry: Not permitted.

• Maximum LTARV: 70%.

Even if you qualify, we may still require a formal interior or exterior appraisal based on your deal specifics at our discretion.

When Exterior Appraisals Are Accepted

Exterior‑only appraisals are allowed for certain property acquisitions, including:
• REO (Real Estate Owned) transactions
• Properties bought through foreclosure auctions
• Sheriff’s sales
• Online auction purchases
• Bankruptcy‑related property sales

These appraisals must be no older than 120 days at closing. If the report is between 120 and 179 days old, a recertification is required.

When a Full Interior Appraisal Is Required

If your project does not meet the criteria for either an in‑house or exterior valuation, a full interior appraisal is needed. Appraisal form requirements by property type are as follows:

Unless transferring an existing appraisal (see below), we will order your appraisal through one of our trusted appraisal management companies (AMCs). You are responsible for the AMC invoice, and any delay in payment will result in a hold on your loan file.

Transferring an Existing Appraisal

We may accept an appraisal you’ve already commissioned if it meets all of the following:

• The appraisal was ordered through a pre‑approved AMC.

• It is no more than 180 days old at the time of closing.

• If between 120–179 days old, it must be recertified.

• The original lender must provide:
  • A signed transfer letter confirming compliance with Appraiser Independence Requirements (AIR)
  • The full PDF appraisal report
  • The XML file version of the appraisal
  • A copy of the paid invoice confirming settlement of the appraisal

Meeting all these conditions will help prevent delays in your loan process.

Scenario: Stabilized Bridge Loan in Arizona

For properties in excellent condition (C4 or better) with minimal deferred repairs, we can finance up to 75% of the “as‑is” value without a full rehab draw requirement. This “stabilized” loan is ideal for properties ready for immediate sale or rental.

Key Loan Details for Arizona

*For loans over $1M, additional guidelines apply.

Extensions: Keeping Your Project on Track

Bridge loans are meant to be short‑term financing solutions (typically 12 to 24 months). If your project isn’t finished within this term, you can extend your loan—but these extensions incur extra fees and interest. To avoid needing an extension, focus on:
• Collaborating with experienced general contractors familiar with Arizona’s distinct challenges
• Keeping your rehab scope focused and efficient
• Securing prompt access to your property (avoiding delays with tenants or complex eviction procedures)
• Developing a dual exit strategy—planning to sell or refinance based on current market conditions

Extension Limits

Extension Fee Schedule

Extension Period	Fee
3 months (1st request)	1% of the total loan amount
3 months (2nd request)	1.5% of the total loan amount
6 months (1st request)	2.5% of the total loan amount

Scenario	Interest Reserve
Lender discretion (0 months)	0 months
Guarantor with FICO 700+	1 month
Guarantor with FICO 660–699	3 months
Guarantor with FICO 660–699 plus credit/red flags	6 months

Coverage Type	Limit	Required?
Dwelling	Replacement cost or full loan amount (no coinsurance)	Yes
Liability	$1 Million per occurrence / $2 Million annual aggregate	Yes
Builders Risk	Included	Yes
Flood	At least the greater of $250,000 or the loan balance (if in a FEMA Special Flood Hazard Area)	Only if in FEMA Special Flood Hazard Area

Coverage Item	Requirement
AM Best Rating	A‑ or higher (preferably A‑VIII or better)
Policy Type	Special form coverage
Deductible	Ranges from $1,000 to $5,000
Lender Designation	Must list OfferMarket Capital LLC as Mortgagee and Additional Insured
Exclusions	No exclusions for windstorm, hail, or named storms
Cancellation Notice	Minimum 30‑day advance notice

Document	Description
Purchase Contract	Fully executed by both you and the seller.
Credit Report	A soft tri‑merge credit check for each guarantor in your borrowing entity.
Background Report	Required for all guarantors.
Track Record	Previous project history for each guarantor.
ID Verification	Valid government‑issued ID (driver’s license, passport, or green card).
Borrowing Entity	Articles of Organization, Operating Agreement/Bylaws, Certificate of Good Standing, and W‑9.
Scope of Work	Detailed renovation budget to determine ARV.
Appraisal Report	We’ll provide a payment link; the report is added to your loan file.
Bank Statements	Two recent statements per guarantor (personal, business, brokerage, or retirement accounts).
Letter of Explanation	Required if further clarification is needed (e.g., large deposits or credit issues).

Document	Description
Settlement Statement	Fully executed by you and the closing agent.
Credit Report	Soft tri‑merge report for each guarantor.
Background Report	Required for all guarantors in the borrowing entity.
Track Record	Past project history for each guarantor.
ID Verification	Valid government‑issued ID (driver’s license, passport, or green card).
Borrowing Entity	Articles of Organization/Incorporation, Operating Agreement/Bylaws, Certificate of Good Standing, and W‑9.
Sunk Costs	Detailed breakdown of funds already spent (purchase, holding, or repairs).
Scope of Work	Detailed rehab budget to determine ARV and draw schedule.
Appraisal Report	An appraisal link will be provided; the report is uploaded upon completion.
Bank Statements	Two latest statements per guarantor (personal or business accounts accepted).
Letter of Explanation	Required if requested—used to clarify financial or background information.

Criteria	Explanation
Experience	Must have completed at least 3 similar rehab projects, preferably at a similar or higher price point.
Market Liquidity	The area must have at least 3 comparable sales within a 2‑mile radius on the MLS in the past 6 months.
Credit Score	A minimum FICO of 680 is required, along with a strong credit history (5+ tradelines showing 24+ months).
Rural Designation	The property must not be classified as rural by the CFPB, USDA, or the appraisal report.
Track Record	Each guarantor must provide a verifiable record of past projects with similar scope and complexity.

Term	Definition
ADU	Accessory Dwelling Unit – a secondary, self‑contained living space on the same parcel as the main residence.
Arms‑Length	A transaction conducted between independent parties to ensure fair market terms.
Non‑Arms‑Length	A transaction where personal or business relationships may influence the fairness, price, or terms.
Initial Advance	The portion of the loan used to cover the purchase price, wired at closing.
Construction Holdback	Funds designated for renovation expenses, released as work milestones are achieved.
Interest Reserves	Funds held in escrow to cover accrued interest until monthly payments are due.
LOE (Letter of Explanation)	A document providing additional context or clarification regarding specific financial or credit issues.
LTC (Loan-to‑Cost)	The ratio of the loan amount to the total project cost (purchase price plus rehab costs).
LTFC (Loan-to‑Full‑Cost)	The ratio of the total loan amount to the entire project cost (purchase price plus construction budget), used for extensive rehabs.
LTV (Loan-to‑Value)	Typically the ratio of the loan amount to the property’s “as‑is” value.
LTARV (Loan-to‑After‑Repair Value)	The ratio of the total loan amount to the property’s estimated market value after renovations.
As Disbursed Interest	Interest that accrues only on the funds that have been released.
Full Boat Interest	Interest calculated on the entire approved loan amount, regardless of the disbursement status.
Lopsided Deal	A scenario where the purchase price or “as‑is” value is significantly lower than the expected rehab costs, thereby limiting LTFC.
GC Agreement	A contract with a General Contractor that outlines project management and execution details.
DSCR (Debt Service Coverage Ratio)	A metric comparing a property's income to its debt obligations, calculated as Rent ÷ PITIA.