California Bridge Loan Program

Last Updated: April 17, 2025

At OfferMarket, we’re focused on helping you excel in the California real estate market. From private capital lending to insurance comparisons to off-market listings, our mission is to position you for long-term success. Through our platform, you’ll find:

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Our Bridge Loan Program offers fast, trustworthy, and cost-conscious financing for purchasing and improving 1–4 unit residential properties across California. Whether you plan to renovate and sell or refinance into a long-term hold, we’re here to guide you toward real estate success in The Golden State.

What Is a Bridge Loan?

A bridge loan is short-term financing that helps you “bridge” the gap until you acquire more permanent funding. In California, real estate investors often use a bridge loan to:

• Purchase and update a property without using all their cash.

• Refinance a cash purchase so there’s capital for renovation.

• Replace an existing loan on a property that still needs more work.

• Acquire a home as-is for a quick turnaround.

• Pull equity out of a cash purchase for another California project.

• Refinance after extensive updates, allowing more time to sell or get new financing.

You’ll see the words “fix and flip loan,” “hard money loan,” or “bridge loan” used by many California investors interchangeably.

How It Works

A typical bridge loan comes in two parts:

1. Initial Advance – Sent to the title company at closing to fund most (or a substantial portion) of your purchase.

2. Construction Holdback – Reserved for rehab costs and accessed through draws as each stage of the work is completed.

You can use both or just the Initial Advance. Some California investors prefer both; others use only the Initial Advance if their rehab is minimal or self-funded.

After improvements, you might sell the property or keep it as a rental—often pairing with a DSCR (Debt Service Coverage Ratio) refinance. If you’re undecided, California’s market signals may reveal the ideal path once your rehab is finished.

Who Uses Bridge Loans?

• House flippers who buy properties at a discount, renovate, then sell for higher returns.

• Buy-and-hold investors working the BRRRR formula (Buy, Rehab, Rent, Refinance, Repeat).

In California, it’s also typical for investors to flip some properties while retaining others for rentals, depending on shifting market conditions.

Bridge Loan Program Guidelines

Project Eligibility

We want to see our California borrowers scale their real estate portfolios responsibly. Because fewer than 0.5% of our loans have defaulted, we maintain stringent underwriting standards to safeguard our capital—especially for newer investors.

Extensive or intricate rehabs are at greater risk of cost overruns or market headwinds. Even established investors can find themselves up against unexpected economic factors. Hence, we categorize projects by scope and consider these classifications before approving a loan.

Initial Advance

Your Initial Advance depends on your deal structure and experience. We look at:

• How many properties you’ve purchased in the last two years.

• How many completed, documented deals you’ve finished in the past five years.

• A minimum credit score of 680 (though 720+ is even more favorable).

• Professional credentials like Realtor, General Contractor, or Professional Engineer.

We never exceed the property’s As Is value. If your contract price is higher than its appraised or internally determined value, we base the loan on the lower figure.

Your exit plan is also factored in. If you plan to sell, ensure at least a 30% margin plus a minimum profit of $15,000. For refinance, aim for a DSCR of 1.1 or above. Are you buying in a remote California location? You’ll need a track record of at least three successful deals to qualify for higher leverage there.

Experience-Based Tiers

Initial Advance by Tier

Adjustments to Initial Advance

Rehab Scope Classification

• Light
  Rehab budget is under 25 % of the purchase price.

• Moderate
  Rehab budget is between 25 % and 49.99 % of the purchase price.

• Heavy
  Rehab budget is between 50 % and 99.99 % of the purchase price.

• Extensive
  Rehab budget equals or exceeds 100 % of the purchase price (covers additions, expansions, ADUs, or “lopsided deals”*).

*A “lopsided deal” occurs when the rehab estimate exceeds the As‑Is value or purchase price. See the LTFC Limits section below for Tier and LTFC requirements.

Rehab Scope Eligibility

Your eligible rehab scope in Arkansas depends on both your experience tier and the rehab classification. To manage risk effectively, we recommend targeting lower‑scope, “cosmetic” rehabs that can be completed quickly.

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

Your maximum LTARV—also known as ARLTV—is based on both your experience tier and rehab scope. California projects with higher execution risk are subject to stricter LTARV caps to protect both investor and lender interests.

California LTFC (Loan-to-Full-Cost) Limits for Extensive Rehabs

When your rehab budget exceeds the property’s purchase price or as-is value, it qualifies as extensive. These projects carry higher risk, so we limit funding through Loan-to-Full-Cost (LTFC) ratios. This ensures you retain a meaningful equity stake and remain financially invested in the success of the project.

Note: LTFC applies only to extensive rehab scopes in California. Moderate and heavy scopes do not require LTFC restrictions.

By aligning your scope and experience with California-specific guidelines, we help you scale responsibly, control risk, and set your projects up for long-term profitability.

Example: No Experience

• Purchase price: $112,000

• Tier: 1 (no completed projects)

• Credit score: 695

• Rehab budget: $25,000

• ARV: $176,000

• Initial Advance: $84,000 (75%)

• Construction Holdback: $25,000

• Total Loan Amount: $109,000

• LTARV: ~61.9%

• LTFC: ~79.6%

• Interest accrual: Full accrual (if under $100,000; otherwise “as disbursed”)

Example: No Experience, Excellent Credit

• Purchase price: $125,000

• Tier: 1 (zero completed projects)

• Credit score: 750

• Rehab budget: $35,000

• ARV: $200,000

• Initial Advance: $100,000 (80%)

• Construction Holdback: $35,000

• Total Loan Amount: $135,000

• LTARV: 67.5%

• LTFC: ~84.3%

• Interest accrual: As disbursed

Example: 5 Completed Projects

• Purchase price: $165,000

• Tier: 4 (5 completed deals)

• Credit score: 745

• Rehab budget: $30,000

• ARV: $270,000

• Initial Advance: $148,500 (90%)

• Construction Holdback: $30,000

• Total Loan Amount: $178,500

• LTARV: ~66.1%

• LTFC: ~91.5%

• Interest accrual: As disbursed

Refinance Guidelines for California Real Estate Investors

At OfferMarket, our California bridge loan refinance approach balances leverage opportunity with sound underwriting. When you’re refinancing a seasoned property whose As-Is market value exceeds your cost basis (original purchase price + capital expenditures), we evaluate the equity position to ensure the borrower retains skin in the game.

Eligibility for Value-Based Refinance + Rehab

You may qualify for value-based leverage and a rehab loan under the following conditions:

• Property must be habitable (C4 condition or better)—no major disrepair

• Must be seasoned for at least 3 years

• If you’re paying off a previous loan, the current lender cannot be a bridge or construction lender, nor should there be default interest, extension fees, or late penalties

• Credit score of 680+ required

• Experience Tier 3 or higher (minimum of 4 verifiable, completed rehab projects)

• Strong support for As-Is value exceeding cost basis, such as local comps

• Supportive refinance scenarios (e.g., rental property now vacant and ready for upgrade to sell)

Guidelines for Wholesale and Assignment Transactions in California

When refinancing or purchasing through a wholesaler or double-close structure, the following rules apply:

• We include assignment fees or price run-ups in your value basis—but only up to 20% of the wholesaler’s purchase price

• Any amount beyond this limit must be covered by you out-of-pocket

• MLS-listed properties may disqualify wholesale fee inclusion

• Arm’s-length transactions only—no related parties

• Required documentation:

  • Full A-B and B-C contract chains

  • Wholesaler’s operating agreement

  • No finder’s fees or referral fees financed

Example:

Construction Holdback

If included in your loan, the construction holdback will be disbursed based on verified progress through draw requests. You may also choose to self-fund the rehab and opt out of the holdback component.

For loans $100,000 or greater, no interest is charged on undrawn holdback amounts under our “as disbursed” accrual method.

Draw Processing Guidelines

Appraisal & Valuation Requirements

A property valuation is required for all OfferMarket bridge loans. Depending on your project, we may require a third-party interior appraisal, exterior appraisal, or in-house valuation.

In-House Valuation (Eligibility)

Even if you meet these criteria, we reserve the right to request a third-party appraisal at our discretion.

Exterior Appraisals

Allowed in specific scenarios:

• Real Estate Owned (REO) purchases

• Foreclosure or sheriff sales

• Online auctions

• Bankruptcy-related acquisitions

Must be dated within 120 days of settlement. If dated between 120–179 days, a recertification is required.

Interior Appraisals

All other scenarios require a full interior appraisal:

We order your appraisal via an AMC; you are responsible for paying the AMC invoice. Loans with unpaid appraisal invoices will be put on hold until payment is made.

Appraisal Transfer Guidelines

We may accept a transfer of an existing appraisal if:

• It was ordered through an approved AMC

• Dated within 180 days of your loan’s closing

• Recertified if older than 120 days

• The transferring lender provides:

  • Signed transfer letter certifying AIR compliance

  • PDF and XML versions of the appraisal

  • Paid invoice as proof of completed payment

Scenario: California Stabilized Bridge Loan

If your California property is in good condition (C4 or better) with no deferred maintenance, we can underwrite it as a Stabilized Bridge Loan—using the As-Is appraised value and offering higher leverage with no rehab holdback required.

Key Loan Details

Extensions

Bridge loans are generally 12–24 months. Extensions can happen, but they come at a cost. To minimize extension needs:

• Hire trustworthy, proven general contractors.

• Skip overly complicated rehabs if you’re a beginner.

• Arrange immediate access after closing.

• Maintain multiple exit routes (sell or refinance).

Extension Limits

Extension Terms and Fees

(All fees are added to the final payoff.)

Ongoing builders risk or fix-and-flip coverage is mandatory during extensions.

Ineligible Property Types

We do not fund:

• Mixed-use or commercial buildings

• Residences with 5 or more units

• Co-ops, condotels

• Mobile or manufactured homes

• Special-purpose luxury homes (e.g., log cabins)

• Properties with agricultural or oil/gas operations

• Seasonal or vacation rentals

• Sites accessible only via dirt roads

Exception Scenarios

We may consider the following on a case-by-case basis:

• Guarantor FICO in the 660–679 range

• Leasehold or ground rent property

• Houses smaller than 700 sq ft (down to 500 sq ft)

• Non-arm’s-length purchases

• Funding interest reserves in the loan

• Other unique factors (lender discretion)

Borrower and Guarantor Requirements

Liquidity Verification for California Bridge Loans

To confirm sufficient liquidity, we verify that your guarantor(s) hold liquid assets equal to your estimated cash‑to‑close plus 25 % of your rehab budget, all under their control.

Eligible Liquid Assets

• Personal bank accounts

• Bank accounts in the borrowing entity

• Bank or brokerage accounts in other business entities (with operating‑agreement review)

• Personal brokerage accounts

• Brokerage accounts under the borrowing entity

• Retirement accounts in your name (valued at 50 % due to withdrawal restrictions)

Important Notes
You’re not required to open a business bank account, though we recommend one for clear bookkeeping and risk oversight. Aside from your cash‑to‑close—confirmed on the settlement statement and wired at closing—you don’t need to move funds from verified accounts.

Credit & Background Review

• Three credit scores on a TriMerge? We use the middle score.

• Two scores? We use the lower one.

• No mortgage tradelines or fewer than five tradelines? Six months of interest reserves required.

• Bankruptcy: discharge ≥ 4 years before closing.

• Foreclosure: completion ≥ 4 years before closing.

• Bankruptcy or foreclosure 4–7 years ago? Three months of reserves required.

• Late mortgage payments in the last 12 months? Letter of explanation and committee review.

• Past‑due balances on any loan or credit line must be paid off pre‑funding.

• Liens, judgments, pending civil suits? Must be cleared or explained with committee approval.

• Pending criminal cases, financial crimes, serious offenses? Not eligible.

• Repeat offenses? Letter of explanation and committee review.

Interest Reserve Requirements

Additional Credit Considerations

• No mortgage tradelines → 6 months reserves

• <5 total tradelines → 6 months reserves

• Bankruptcy → Must be discharged >4 years prior

• Foreclosure → Must be completed >4 years prior

• BK or FC within 4–7 years → Minimum 3 months reserves required

• Late mortgage payments (past 12 months) → LOE required, may be denied

• Any past due balances (mortgage or other credit) → Must be paid before closing

• Involuntary liens or judgments → Must be cleared

• Pending civil lawsuits → LOE required, reviewed case-by-case

• Pending or prior criminal/financial crimes → Ineligible for funding

• Repeat offenses → LOE required; reviewed case-by-case

Financed Interest Payments Option

To help you preserve cash flow during renovation, OfferMarket may allow financed interest payments—rolling accrued interest into your final loan payoff instead of requiring monthly payments.

Example Scenario:

Property Sourcing Guidelines

Additional review applies to the following scenarios:

• New markets → General Contractor agreement or LOE required

• Wholesale / Price escalations / Non-arm’s-length deals → Chain of contracts + justification required

• Condo conversions / Heavy renos → Architect or engineer documentation required

Always include:
✓ Purchase contract
✓ Settlement statement
✓ Payoff letter (if applicable)
✓ Track record
✓ Entity formation docs

California Bridge Loan Insurance Requirements

Bridge loan borrowers must protect both the property and their liability exposure. This is handled through Builders Risk or Fix & Flip insurance.

Required Coverages

Policy Requirements

Pro Tip: Upon taking possession, install smoke detectors, locks, and security cameras to meet policy compliance and avoid denied claims.

Frequently Asked Questions About California Bridge

What states does OfferMarket fund in?

We currently fund bridge loans in over 40 states, including California. In states requiring NMLS licensing or where we don’t lend directly, we refer you to a licensed capital partner.

Can I have multiple bridge loans at once?

Yes. Many of our California clients manage several properties simultaneously. We’ll assess your liquidity and execution capacity before approving additional loans.

Are bridge loans considered commercial?

Yes. These are business-purpose loans issued to LLCs or corporations. Even when secured by residential property, they are classified as commercial loans.

What’s the minimum loan amount?

$25,000.

Which property types qualify?

We finance non-owner occupied 1–4 unit residential properties, including:

• Single-family homes

• Duplexes, triplexes, and fourplexes

• Townhomes

• Warrantable condominiums

5+ unit multifamily and mixed-use properties are not eligible under this program.

How is LTV Calculated?

• LTV = Loan ÷ As-Is Value

• LTARV = Loan ÷ After-Repair Value

• Initial advance is based on the lower of the As-Is value or purchase price (or prior closing price for refinances).

What Are the Credit Requirements?

• Minimum FICO: 680

• 660–679: Case-by-case exceptions possible

• We only assess guarantors—non-guarantors’ credit is not reviewed.

What Are the Experience Requirements?

Experience isn’t required—but verified rehab history improves your leverage via our Experience Tier System.

Does Wholesaling Count?

No. Wholesaling doesn’t count as experience since you didn’t assume the financial risk or complete a rehab.

What documentation is required?

OfferMarket’s Loan File system streamlines your submission. Most documents carry forward into future deals.

Purchase Loan File Checklist

Refinance Loan File Checklist

Are there Special Rules for $1M+ Loans in California?

Glossary of Terms

Get Your Instant California Bridge Loan Quote

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