Bridge Loan Kentucky

Last Updated: April 28, 2025

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Our Bridge Loan Kentucky program is crafted to give you the fast, reliable, and affordable funding you need to purchase and renovate 1-4 unit residential investment properties.

Whether your strategy is to fix and flip for a quick return or hold and refinance into a DSCR loan, we’re here to partner with you and fuel your investment goals.

Let’s explore everything you need to know about the OfferMarket Bridge Loan Program in Kentucky!

What is a Bridge Loan?

A bridge loan is a short-term financing solution that provides the capital you need to move forward on a property investment while waiting for longer-term funding or project completion. It’s the financial bridge between your current situation and your future success.

Bridge loan scenarios

For Kentucky real estate investors, bridge loans are commonly used in these scenarios:

• Purchasing and rehabbing a fixer-upper or outdated property — ideal when you want to minimize your personal cash exposure while renovating.

• Refinancing a property bought with cash to free up funds for renovation — perfect when you snagged an off-market deal requiring a fast, all-cash closing.

• Refinancing an existing loan on a property that still needs renovation — especially useful when your private or hard money lender needs repayment, but your project isn’t finished yet.

• Buying a property without plans for rehab — great for snapping up below-market deals with the intent to resell as-is.

• Refinancing a cash purchase with no renovation plans — ideal if you’re looking to leverage the equity from your property

Whether you're flipping homes in Louisville or stabilizing a rental in Lexington, Kentucky investors refer to these as hard money loans or fix and flip loans — and our bridge loan fits the bill.

How does the Kentucky bridge loan work?

A Kentucky bridge loan through OfferMarket is designed to be as adaptable as your strategy. Each loan has two key components:

Initial Advance
This is the portion of your total loan amount allocated for the property purchase price. These funds are wired directly to the title company at closing.

Construction Holdback

This covers your renovation budget — funds are disbursed to you as reimbursements after you complete stages of your rehab project.

Flexibility is the name of the game:

• Only need funds for the purchase? Skip the construction holdback.

• Only need rehab funding because you bought the property with cash? Skip the initial advance.

• Need both? We've got you covered.

In practice, most Kentucky real estate investors choose a mix of initial advance plus construction holdback to maximize their leverage and minimize the use of their own cash. Still, many flippers and landlords prefer to handle the rehab with their own funds, especially when speed and simplicity are top priorities. Some investors pay cash upfront, then tap into a construction holdback for 100% of their renovation budget.

In short: we meet you where you are. The Kentucky bridge loan program is your flexible financing partner.

The exit plan for your Kentucky bridge loan will typically fall into one of two buckets:

1. Flip the property for a profit

2. Stabilize the property and refinance into a long-term DSCR loan

Not sure which exit makes sense right now? No problem. Many investors adjust their strategy based on the local market and deal dynamics.

For example:
You may begin a project with BRRRR (Buy, Rehab, Rent, Refinance, Repeat) in mind, but once rehab is done, you realize that resale profits in Louisville are too good to pass up. Flip the property, pocket the gains, and roll into your next investment.

Also, perhaps you started out expecting to flip, but the Kentucky housing market cools mid-project. Instead of selling, you pivot to rent, refinance into a DSCR loan with low prepayment penalties, and wait for the market to heat back up.

The best deals in Kentucky offer you options. Dual exit strategies help you reduce risk and stay agile.

Who benefits from Kentucky bridge loans?

Bridge loans are a go-to tool for two key types of real estate investors:

• Fix-and-flip investors ("flippers")

Renovate distressed properties and resell for profit.

• Rental property investors (BRRRR method)

Buy, rehab, rent out, and refinance into long-term rental loans.

Ask about our Fix and Rent Bundle — a combo package with bridge financing for purchase and rehab, plus a discounted DSCR loan for your refinance!)

Many investors in Kentucky use a hybrid approach — flipping some properties, holding others as rentals — depending on what the market delivers. Flexibility like this is a hallmark of successful real estate investing.

Kentucky Bridge Loan Program Guidelines

Project Eligibility

Our mission at OfferMarket is to help Kentucky investors build wealth through real estate — safely and responsibly. We’re proud to report that fewer than 0.5% of the loans we’ve ever originated have defaulted and required foreclosure. Our team is here to help ensure your project is set up for success.

While we don’t require experience to qualify, we know that investors taking on heavy rehab projects without proper background face greater risks. Extensive renovations can encounter unexpected delays, cost overruns, and market shifts — even seasoned investors can get caught off guard.

That’s why we act as more than just a lender. We’re your risk management partner, helping you select the right deals and make smart financing choices. Below, you’ll find how our structured rehab classification system and experience tiers guide loan eligibility.

Initial Advance

The amount we lend toward your purchase (initial advance) depends on a few key factors, including your experience and the specifics of the deal.

We look at:

• The number of investment properties owned in the past 24 months

• The number of similar completed rehab projects over the past 5 years

• Minimum credit score: 680 (but we prefer 720+ for personal guarantors)

Realtors, General Contractors, and Professional Engineers may qualify for enhanced leverage.

Note: If the contract purchase price exceeds the “As Is” value in our appraisal or valuation, we base your initial advance on the lower value — not the contract price.

Your chosen exit strategy plays a big role in determining the size of your initial advance.

• Planning to sell the property?
  You’ll need to show a minimum projected gross margin of 30% along with at least $15,000 in projected profit for the deal to qualify at your target loan amount.

• Looking to rent and refinance?
  If your plan is to hold the property as a rental — or if your flip numbers don’t quite hit the mark — then the project should achieve a minimum Debt Service Coverage Ratio (DSCR) of 1.1 after repairs are complete.

We recommend using our Fix and Flip Calculator and DSCR Calculator to confidently run the numbers on your exit strategies and make sure your project meets these benchmarks.

Experience-Based Tiers

Initial Advance by Tier

85% is available on an exception basis for borrowers with excellent credit and liquidity.

Adjustments to Initial Advance

The initial advance percentage for your Kentucky bridge loan may be adjusted based on specific deal characteristics and borrower qualifications. Below are the scenarios where adjustments may apply:

Rehab Scope Classification

A low purchase price "lopsided deal" is when the As Is value or purchase price is less than the rehab amount. See LTFC Limits section below for Tier and LTFC limits.

Rehab Scope Eligibility

Your rehab scope eligibility for a Kentucky bridge loan is determined by your experience tier. Our approach encourages proper risk management by advising investors to focus on lighter, more cosmetic rehabs that can be completed quickly and efficiently.

LTARV Limits

The maximum loan-to-after-repair value (LTARV or ARLTV) allowed for your Kentucky bridge loan is determined by your experience tier and rehab scope classification.

LTFC Limits

Loan-to-Full-Cost (LTFC) applies to projects classified as Extensive rehab, where the rehab budget exceeds the purchase price or As Is value of the property. LTFC represents the percentage of total project costs (purchase + rehab) that may be financed, ensuring the borrower contributes a portion of the project costs.

Example: No Experience

Example: No Experience, Excellent Credit

Example: 5 Experience

Refinance Using As Is Value Instead of Cost Basis for Initial Advance

Our standard underwriting for Kentucky bridge loans typically lends based on your cost basis — the total of your purchase price plus any sunk costs. This approach ensures that you maintain equity in the deal, keeping meaningful "skin in the game."

However, in certain refinance scenarios, where the property's current As Is value is higher than your cost basis, OfferMarket may approve leverage against the As Is value. Here’s what we require in these situations:

• Property must be habitable (C4 condition or better); cannot be in disrepair.

• Property must be seasoned for at least 3 years.

• Payoff lender must not be a bridge or construction lender; no default interest, extension fees, or late fees should apply.

• Minimum 680 credit score.

• Experience Tier 3 or higher (at least 4 similar completed rehab projects).

• Solid support for As Is value exceeding cost basis through neighborhood comps.

• Scenario should demonstrate strong fundamentals — for example, a property rented out for several years with tenants recently vacating, now ready for renovation and resale.

Transactions Involving Wholesalers, Price Run-Ups

If your Kentucky project involves a wholesaler or price escalation between contracts, here’s how we handle it:

• The entire assignment fee or double-close price run-up may be included in the value basis, as long as the price increase does not exceed 20% of the original seller-to-wholesaler contract price.

• You are responsible for any portion of the price run-up above this 20% threshold.

Example:

Wholesaler Transaction Guidelines:

For Kentucky transactions involving wholesalers, the following guidelines apply:

• OfferMarket may include the assignment fee or double-close price run-up in your cost basis for the initial advance, but only up to 20% of the A-B purchase price.

• We reserve the right to exclude financing of the assignment fee or double-close price run-up if the property was listed on the MLS.

• Full documentation is required, including the chain of contracts/assignments (A-B, B-C) and the wholesaler's operating agreement.

• OfferMarket will not finance finders fees or referral fees.

• The transaction must be arm’s length between all parties.

Construction Holdback

For Kentucky bridge loans, the construction holdback portion of your loan is disbursed through a draw reimbursement process. You’ll receive funds based on verified progress against your submitted scope of work.

If you prefer to fund the rehab yourself and have sufficient liquidity, you can elect to exclude the construction holdback from your loan structure.

Additionally, if your total loan amount is $100,000 or higher, you will benefit from "As Disbursed" interest accrual — meaning no interest is charged on undrawn rehab funds.

Appraisal and In-House Valuation

Every Kentucky bridge loan requires a property valuation. Depending on the project details, this may involve a third-party appraisal or an in-house valuation.

In-House Valuation Eligibility

OfferMarket retains the right to require a third-party interior or exterior appraisal at its discretion, even if these in-house valuation criteria are met.

Exterior Appraisal

Exterior appraisals are acceptable for Kentucky bridge loan scenarios where the property is being acquired through:

• REO sale

• Foreclosure auction

• Sheriff’s sale

• Online auction

• Bankruptcy sale

The exterior appraisal must be dated within 120 days of the settlement date. If the appraisal is between 120 and 179 days old, a recertification will be required to remain eligible.

Interior Appraisal

For Kentucky bridge loans, any scenario not eligible for an exterior appraisal or in-house valuation will require a full interior appraisal. The required appraisal forms are determined by the property type:

Unless there is an appraisal transfer (see next section), OfferMarket will handle ordering the appraisal through an appraisal management company (AMC). You will be responsible for completing the AMC’s invoice. Loan requests with unpaid appraisal invoices will be placed in HOLD status until payment is confirmed.

Appraisal Transfer

If you already obtained an appraisal through another lender, the report may be eligible for transfer to OfferMarket for your Kentucky bridge loan, provided the following conditions are met:

• The appraisal was ordered through an approved appraisal management company.

• The appraisal is less than 180 days old at the time of closing.

• If the appraisal is between 120 and 179 days old, it must be recertified before use.

• The transferring lender provides OfferMarket with:

  • A signed transfer letter that certifies the appraisal was ordered and processed in compliance with Appraiser Independence Requirements (AIR).

  • The full appraisal report (PDF and XML formats).

  • Proof of payment via the appraisal invoice.

Scenario: Stabilized Bridge Loan

If the Kentucky property you’re financing is stabilized — meaning there is no deferred maintenance and the appraisal condition rating is C4 or better — your loan may qualify as a stabilized bridge loan. In this scenario, OfferMarket will appraise the property on an As Is basis and may fund up to 75% of the As Is value.

Key Loan Details

Extensions

Bridge loans, including our Kentucky bridge loan program, are intended as short-term financing solutions, typically between 12 and 24 months. Most projects are completed and paid off well within this time frame.

While extensions are available, they are not ideal. Extending your bridge loan incurs additional fees, increases interest costs, and could place you at risk of foreclosure if the loan is not paid off after the extension period.

Best Practices to Avoid Extensions

To minimize the likelihood of needing an extension on your Kentucky bridge loan, focus on avoiding these high-risk factors:

• Hiring general contractors with limited experience or poor references.

• Taking on a rehab scope that is aggressive relative to your experience and liquidity.

• Choosing markets with slow zoning or permitting processes.

• Entering scenarios where you don’t have immediate property access (e.g., tenant holdover, inherited leases, eviction requirements).

• Working on deals that lack a dual exit strategy (ability to either sell or refinance).

Proper planning around these factors significantly reduces project delays and the need for costly extensions.

Extension Limits

If your Kentucky bridge loan has not been fully paid off by the end of the original loan term, you may request an extension. Extensions are available for up to 50% of the original loan term. Requests can be made in either 3-month or 6-month increments, following the extension terms and fees schedule.

Extension Terms and Fees

The following fee schedule applies when requesting an extension for your Kentucky bridge loan:

Extension Prerequisites

Before an extension can be approved for your Kentucky bridge loan, you will need to confirm that your builder’s risk insurance policy remains active for the entire requested extension period.

Ineligible Property Types

The following property types are not eligible for funding under the Kentucky bridge loan program:

• Mixed use properties

• 5+ unit multifamily buildings

• Condotels

• Co-ops

• Mobile or manufactured housing

• Commercial properties (non-residential)

• Cabins or log homes

• Properties with oil or gas leases

• Operating farms, ranches, or orchards

• Vacation or seasonal rentals

• Unique, exotic, or luxury properties

• Properties on unpaved or dirt roads

Exception Scenarios

Some transactions may qualify for exceptions under specific conditions. The Kentucky bridge loan program may allow exceptions for the following scenarios, subject to loan committee discretion:

• Guarantor credit score between 660–679

• Leasehold (ground rent) property structure

• Single family property sized between 500 to 699 sq ft

• 2–4 unit property where one or more units are between 400 to 499 sq ft

• Funding initial advance based on As Is value exceeding cost basis

• Non-arm's length transactions

• Financed interest payments instead of monthly interest payments

Borrower and Guarantor Requirements

Eligibility for a Kentucky bridge loan includes specific requirements for borrowers and guarantors, as outlined below:

Liquidity Verification

To ensure financial stability and reduce risk, OfferMarket requires liquidity verification for your Kentucky bridge loan. This ensures that you, as the borrower or guarantor, have enough available funds to safely cover your portion of project costs.

Liquidity Requirement

• Minimum of estimated cash to close plus 25% of the rehab budget held in liquid assets controlled by one or more guarantors.

Eligible Liquid Assets

• Bank account(s) in the personal name of the guarantor(s)

• Bank account(s) in the name of the borrowing entity

• Bank account(s) in the name of another business entity (requires operating agreement verification)

• Brokerage account(s) in the personal name of the guarantor(s)

• Brokerage account(s) in the name of the borrowing entity

• Brokerage account(s) in the name of another business entity (requires operating agreement verification)

• Retirement account(s) in the personal name of the guarantor(s) (50% reduction applied due to restricted nature of the account)

Important Information

• You are not required to maintain a business bank account, though this is recommended for best practices in accounting and risk management.

• Aside from the cash due from borrower (cash to close), which will be confirmed via your settlement statement and wired by you to the title company or real estate attorney, you do not need to move funds from your verified accounts.

Credit and Background Items

The following credit and background checks apply to all guarantors in the Kentucky bridge loan program:

• If three credit scores are returned, the middle score is used (second highest).

• If two credit scores are returned, the lower score is used.

• If there are no mortgage tradelines, six months of interest reserves are required.

• If fewer than five tradelines on the credit report, six months of interest reserves are required.

• Bankruptcy: Discharge date must be more than four years from the loan settlement date.

• Foreclosure: Completion date must be more than four years from the loan settlement date.

• Bankruptcy or foreclosure between four to seven years requires at least three months of interest reserves.

• Late mortgage payments in the past 12 months require a Letter of Explanation (LOE) and are subject to loan committee review.

• Any past due balances on mortgage or non-mortgage tradelines must be paid in full prior to funding.

• Any involuntary liens or judgments (e.g., tax liens, child support) must be cleared before funding.

• Pending civil lawsuits require an LOE and are subject to loan committee discretion.

• Pending criminal lawsuits: Not eligible for funding.

• Financial crime history: Not eligible for funding.

• Serious or repeat crime history: LOE required and subject to loan committee discretion.

Interest Reserves

Interest reserves refer to interest payments collected at the time of settlement and held in a servicing escrow account. If interest reserves apply to your Kentucky bridge loan, these funds will be used to cover your monthly interest payments until the reserve is exhausted. Once the reserve is depleted, you will begin making interest payments directly from your verified bank account.

Financed Interest Payments

To help protect your liquidity and avoid unnecessary strain on your cash flow during the rehab phase, your Kentucky bridge loan may qualify for financed interest payments. This allows interest to accrue and be added to your payoff statement instead of requiring monthly out-of-pocket payments.

Example Scenario: Financed Interest

Property Sourcing Guidelines

OfferMarket prioritizes sound project selection and proper risk management. The following property sourcing guidelines apply to Kentucky bridge loans:

• New market transactions require either a General Contractor agreement or a Letter of Explanation explaining why a GC is not required.

• Properties with prior sale price increases, wholesale deals, and non-arm's length transactions will require additional documentation and review.

• For condos, conversions, and projects with significant renovation plans, architect or engineer letters (or permits) may be required.

• All submissions must include:

  • Purchase contracts

  • Settlement statements

  • Payoff letters (if applicable)

  • Track record of the borrower

  • Required formation documents for the borrowing entity

Bridge Loan Insurance Guidelines

Insuring your Kentucky investment property properly is essential for protecting your assets and meeting loan requirements. Builder’s Risk insurance (also known as Fix and Flip insurance) is required for properties under construction, vacant, or in poor condition.

Required Coverages and Limits

Coverage Details

For Kentucky bridge loans, the following insurance coverage details are required to meet underwriting standards:

Pro tip: As soon as you take ownership of your Kentucky investment property, install smoke detectors, locks, and security cameras. This ensures compliance with your insurance policy and helps prevent claim denials.

Frequently Asked Questions

What states does OfferMarket fund bridge loans?

OfferMarket provides bridge loan funding across the United States, including Kentucky. Below is the full list of eligible states:

• Arizona*

• Alabama

• Arkansas

• California

• Colorado

• Connecticut

• Delaware

• Florida

• Georgia

• Hawaii

• Idaho

• Illinois

• Indiana

• Iowa

• Kansas

• Kentucky

• Louisiana

• Maine

• Maryland

• Massachusetts

• Michigan

• Mississippi

• Missouri

• Minnesota*

• Montana

• Nebraska

• Nevada*

• New Hampshire

• New Jersey

• New Mexico

• New York

• North Carolina

• North Dakota*

• Ohio

• Oklahoma

• Oregon

• Pennsylvania

• Rhode Island

• South Carolina

• South Dakota*

• Tennessee

• Texas

• Utah

• Vermont*

• Virginia

• Washington

• Washington DC

• West Virginia

• Wisconsin

• Wyoming

(*) In states where an NMLS license is required for business purpose lending or where we do not directly lend, OfferMarket operates as a rate shopping service and refers your loan to a licensed capital provider.

Can I do more than one bridge loan at a time?

Yes, OfferMarket clients — including those using the Kentucky bridge loan program — can hold multiple bridge loans simultaneously. Many of our investors manage several projects at once.

However, our top priority is helping you manage risk safely. If we determine that your liquidity, experience level, or pace of execution does not support additional loans, we will address this with you directly to ensure responsible growth.

Are bridge loans commercial?

Yes. Bridge loans, including the Kentucky bridge loan program, are classified as commercial loans because they are issued to your business entity (LLC or Corporation) and are intended for business purpose use.

What is the minimum loan amount?

The minimum loan amount for the Kentucky bridge loan program is $25,000.

Which property types are eligible?

The Kentucky bridge loan program finances non-owner occupied 1–4 unit residential properties, including:

• Single-family residences

• Townhomes

• Small multifamily (2–4 units)

• Warrantable condominiums

Note:

The following property types are not eligible under this program but may qualify for other OfferMarket loan programs:

• 2–4 unit mixed-use properties

• 5–9 unit mixed-use properties

• 5–9 unit multifamily properties

• 10+ unit residential properties

• Non-residential commercial properties (such as retail, office, or industrial)

How do you calculate Loan-to-Value (LTV)?

For Kentucky bridge loans, LTV typically refers to loan-to-after-repair value (LTARV), though loan-to-as-is value (LTV) is also considered depending on the transaction type.

How it works:

• The initial advance is based on the lower of the purchase price or As Is value.

• In refinance scenarios, we use the purchase price from your previous closing (if recent) or the As Is value determined in the appraisal.

• LTARV is calculated as:
  Total loan amount (initial advance + construction holdback) ÷ After-repair value (ARV).

What are the credit requirements?

The Kentucky bridge loan program requires a minimum FICO score of 680. Borrowers with scores between 660 and 680 may still be considered on an exception basis.

We assess the credit score of each individual who will be personally guaranteeing the loan. Credit scores of non-guarantor members of the borrowing entity are not reviewed.

What are the experience requirements?

Experience is not required to qualify for a Kentucky bridge loan.

That said, verifiable experience in similar rehab projects directly affects your eligibility for higher leverage and more favorable terms through our experience tier system.

When you complete the Track Record section of your Loan File, our underwriting team will independently verify your experience based on:

• Settlement statements

• Operating agreements

• Other supporting documentation

Does being a wholesaler count toward experience?

No, acting as a wholesaler on a transaction does not count toward your experience score. Our experience tiers are based on projects where you were financially responsible for completing the rehab and managing the investment.

What Documentation Is Required?

To process your Kentucky bridge loan efficiently, OfferMarket uses a structured Loan File system. The documentation submitted is securely stored and can be reused to streamline your future loan applications.

Purchase Transaction Documentation

Refinance Transaction Documentation

Are there special requirements for loans over $1M?

Yes, Kentucky bridge loans over $1 million (up to the $2 million maximum) are subject to adjusted guidelines:

Glossary of Key Terms

Get Your Kentucky Instant Bridge Loan Quote

OfferMarket Capital LLC, a leader in private lending for 1–4 unit residential real estate investors, specializes in bridge loans and DSCR loans. We are committed to helping Kentucky investors build wealth through real estate — and we would love the opportunity to partner with you on your next project.

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Thousands of real estate investors get value from OfferMarket every month. Membership is entirely free and includes the following benefits:

💰 Private lending
☂️ Insurance rate shopping
🏚️ Off market properties
💡 Market insights

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