Bridge Loan Texas

Last Updated: May 2, 2025

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Our Bridge Loan program is designed to provide you with fast, dependable, and affordable financing to acquire and improve 1-4 unit residential investment properties across the Lone Star State.

Whether your exit strategy is to flip the property for a profit, or to rent and refinance into a DSCR loan, we would love the opportunity to earn your business and contribute to your success in the diverse Texas market—from the urban core of Dallas to the suburbs of San Antonio and rural corners of East Texas.

Let’s review the OfferMarket Bridge Loan Program!

What is a bridge loan?

A bridge loan is a short-term loan designed to provide temporary financing until a more permanent solution is secured.

Bridge loan scenarios

Texas real estate investors leverage bridge loans in various ways:

• You’re buying a distressed home in Fort Worth and want to renovate it—using minimal personal cash—to sell or rent.

• You paid cash for a property in Austin under pressure for a quick close. Now you need to cash out and finish the rehab.

• You’re halfway through updating a fixer-upper in Lubbock, and your current lender wants out. A bridge loan helps you finish strong.

• You snagged an off-market duplex in Arlington at a steep discount and plan to resell it as-is for profit.

• You bought a house in Waco for cheap and need access to your equity for the next deal—no rehab needed.

• You already renovated a property in Corpus Christi and just want more time to sell or refi.

You might hear bridge loans in Texas called hard money loans or fix and flip loans—they’re often used interchangeably in local investor circles.

How it works

A bridge loan has two components:

• Initial Advance -- the amount of the total loan that will go towards the purchase price. This amount is wired to the title company at settlement.
• Construction Holdback -- the amount of the total loan that will go towards the rehab of the property. This amount is wired to you via draw reimbursement.

Bridge loans are designed to be flexible. You don't need an initial advance if you only want a construction holdback. You don't need a construction holdback if you only want an initial advance.

In practice, most real estate investors in Texas use an initial advance and a construction holdback to optimize their leverage and reduce the use of their own cash. There are, however, many investors that prefer to only use an initial advance because they either want to use their own funds for the rehab of the property, or they do not intend to improve the property and therefore don't need a construction holdback. There are also investors who purchase a property in cash and simply want a construction holdback of up to 100% of their rehab budget in order to complete the rehab of the property. The world of bridge loans is your oyster!

Your exit strategy will either be to flip the property for a profit, or to rent the property and refinance out of the bridge loan into a longer term loan such as a DSCR loan. It's not uncommon for real estate investors to switch their exit strategy based on market conditions and financial projections, so it's ok if you aren't sure which exit strategy is the right choice -- no need to make that decision with haste.

For example, you may go into a project in Austin thinking BRRRR - buy, rehab, rent, refinance, repeat - all the way but when you complete the project you may realize rental demand is softer than you expected and the resale market would provide an attractive profit to then reinvest into a better rental deal.

Another common example: you go into a project in Dallas expecting to flip the property but the housing market cools down so you rent it out and refinance into a DSCR loan with a low prepayment penalty, wait a couple of years and then give yourself the option to sell once the market heats back up.

These examples illustrate the importance of focusing on projects that have dual exit strategy options to mitigate your risk.

Who uses bridge loans?

• Fix and flip investors ("flippers")
• Rental property investors ("BRRRR Method"*

(*) Learn about our Fix and Rent bundle which is a bridge loan for the purchase and rehab, and then a discounted DSCR loan for the refinance

As noted above, it's not uncommon for real estate investors to have a hybrid strategy where they ultimately flip certain properties and rent out certain properties based on how scenarios play out. This is absolutely a best-practice we see across our client base.

Bridge Loan Program Guidelines

Project Eligibility

We’re committed to helping Texas investors build wealth safely and sustainably. That’s why our foremost priority is managing risk effectively. OfferMarket’s default rate is among the lowest in the industry—less than 0.5% of our bridge loans have required foreclosure.

Inexperienced borrowers taking on high-risk, major rehabs often face delays, budget issues, and shifting market conditions. These challenges are magnified during periods of economic instability—even in strong Texas markets.

Our role as your bridge loan partner in Texas goes beyond lending. We serve as your advisor and risk mitigation ally. That’s why we assess every deal through a structured rehab classification system to ensure responsible project selection.

Initial Advance

The size of your initial advance depends on both your experience and the specifics of your project. We evaluate how many properties you’ve owned over the past two years and how many similar rehab projects you’ve successfully completed in the past five years.

We require a minimum credit score of 680, with a strong preference for scores above 720 for the guarantor. Licensed Realtors, General Contractors, and Professional Engineers in Texas may qualify for higher leverage.

If your purchase price exceeds the As Is value (from our appraisal or in-house valuation), we’ll base the loan on the lower value—not the contract price.

Your exit strategy also affects your advance:

• Selling? Must show a 30% gross margin and at least $15,000 projected profit.

• Refinancing? A post-repair DSCR of at least 1.1 is required.

In Texas rural zones, a lower advance may apply, and borrowers must have completed at least 3 similar projects.

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

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

LTARV Limits

LTFC Limits

LTFC, or “Loan-to-Full-Cost,” is used in high-execution-risk projects where the renovation budget exceeds the purchase price. It ensures investors in Texas have skin in the game, especially when the deal is “lopsided” with disproportionate rehab costs compared to the property’s current value.

Example: No Experience

Purchase price: $100,000
Tier: 1 (0 similar verifiable experience)
Credit score: 695
Rehab budget: $24,000
ARV: $150,000
Initial advance: $75,000 (75%)
Construction holdback: $24,000
Total loan amount: $99,000
LTARV: 66%
LTFC: 79.8%
Interest accrual: Full boat

Example: No Experience, Excellent Credit

Purchase price: $100,000
Tier: 1 (0 similar verifiable experience)
Credit score: 750
Rehab budget: $24,000
ARV: $150,000
Initial advance: $80,000 (80%)
Construction holdback: $24,000
Total loan amount: $104,000
LTARV: 69.33%
LTFC: 83.9%
Interest accrual: As disbursed

Example: 5 Experience

Purchase price: $100,000
Tier: 4 (5 similar verifiable experience)
Credit score: 750
Rehab budget: $20,000
ARV: $150,000
Initial advance: $90,000 (90%)
Construction holdback: $20,000
Total loan amount: $110,000
LTARV: 73.33%
LTFC: 91.67%
Interest accrual: As disbursed

Refinance using As Is value instead of Cost Basis for Initial Advance

In Texas, some properties appreciate rapidly—especially in markets like Austin, Dallas, and Frisco. When refinancing a seasoned property, we may base your initial advance on the current As Is value instead of your original cost basis (purchase + improvements), provided strict criteria are met:

• Property is habitable (C4 condition or better)

• Held for 3+ years

• Payoff lender is not a bridge or construction lender

• Guarantor credit score is 680+

• Borrower has Tier 3+ experience

• Strong support for current market value exceeding cost basis (comps)

• Clear, logical scenario (e.g. previously rented, now vacant and ready for renovation)

Transactions involving wholesalers, price run-ups

When working with wholesalers in Texas—common in markets like Houston and San Antonio—we allow for assignment fees or markup pricing in your value basis, up to 20% of the A-B contract price.

Example:
A-B Contract: $100,000
Assignment Fee: $25,000
As Is Value: $125,000
Value basis: $120,000 (capped at 20%)

Guidelines:

• Price increase must not exceed 20% of A-B contract

• MLS-listed properties may not qualify

• Full contract chain and operating agreements required

• No financing of finders or referral fees

• Must be an arm's length transaction

Construction Holdback

Texas investors often seek draw-based financing to complete renovations. Our construction holdback system allows for reimbursements as you execute your scope of work.

If you have the capital to self-fund the rehab, you can opt out of a construction holdback.

For total loans over $100K, you won’t be charged interest on undrawn holdback funds (accrued “as disbursed”).

Appraisal and In-house valuation

Every Texas bridge loan requires a valuation. We’ll determine whether a third-party appraisal or internal valuation is appropriate based on your scenario.

In-house valuation

We may still request an appraisal at our discretion.

Exterior appraisal

Exterior-only appraisals are permitted in special acquisition scenarios common in Texas auctions and bank sales:

• REO sale

• Foreclosure auction

• Sheriff’s sale

• Online auction

• Bankruptcy sale

Appraisal must be dated within 120 days of closing. Between 120–179 days requires recertification.

Interior appraisal

For all other situations, a full interior appraisal is required:

OfferMarket will handle the appraisal order and provide the invoice. Payment is required to proceed with underwriting.

Appraisal transfer

If you already have an appraisal that wasn’t ordered through OfferMarket, we may be able to transfer it—common for Texas investors switching lenders mid-deal. To qualify:

• The appraisal must be ordered via an approved Appraisal Management Company (AMC)

• Must be dated within 180 days of our closing date

• If older than 120 days but under 180, a recertification is required

We require the following from the originating lender:

• A signed transfer letter confirming AIR (Appraiser Independence Requirements) compliance

• PDF and XML copies of the report

• Proof of payment for the appraisal invoice

Scenario: Stabilized Bridge Loan

In cases where a Texas property is already stabilized—no deferred maintenance and condition rating of C4 or better—we can fund up to 75% of the As Is value. These deals, called stabilized bridge loans, are ideal for rent-ready or lightly updated homes.

Key Loan Details

Extensions

Bridge loans are designed to be short-term—typically 12 months—with an option to extend up to 24 months total. In Texas, where project timelines can be impacted by permitting or contractor delays, it's critical to avoid unnecessary extensions due to added costs and potential foreclosure risk.

Here’s how to reduce extension risk:

• Work with reputable general contractors (especially in competitive metros like Austin and Dallas)

• Don’t take on more rehab than your experience or liquidity can handle

• Avoid properties with restricted access (e.g. inherited tenants or squatters)

• Target deals with dual exit options (resale or rental refi)

Extension Limits

Extension Terms and Fees

Extension Prerequisites

Before a loan extension can be approved, you must provide active proof of Builders Risk insurance covering the duration of the extension period.

Ineligible Property Types

The following types of Texas properties are not eligible for our bridge loan program:

• Mixed use

• 5+ unit multifamily

• Condotels

• Co-ops

• Mobile/manufactured housing

• Commercial buildings

• Cabins/log homes

• Properties with oil/gas leases

• Operating farms, ranches, orchards

• Vacation/seasonal rentals

• Unique/exotic/luxury properties

• Homes on unpaved or dirt roads

Exception scenarios

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

• Guarantor credit scores from 660–679

• Leasehold/ground rent

• Single family homes 500–699 SqFt

• 2–4 unit properties with one or more units between 400–499 SqFt

• Initial advance based on As Is value higher than cost basis

• Non-arm's length transactions

• Financed interest payments

Borrower and Guarantor Requirements

Credit and Background Items

Texas investors applying for a bridge loan must meet the following credit and background standards:

• If 3 credit scores are returned, we use the middle score (2nd highest).

• If 2 scores are returned, we use the lowest.

• If no mortgage tradelines appear, 6 months of interest reserves are required.

• If fewer than 5 tradelines are listed, 6 months of reserves are also required.

• Bankruptcy must be discharged >4 years prior to settlement.

• Foreclosures must be completed >4 years prior to settlement.

• If bankruptcy or foreclosure occurred 4–7 years prior, 3 months reserves are required.

• Late mortgage payments in the past 12 months require a letter of explanation and are subject to review.

• Past due tradelines must be resolved before funding.

• Involuntary liens or judgments (tax liens, child support) must be cleared before funding.

• Civil lawsuits require a letter of explanation and review.

• Criminal lawsuits disqualify the borrower.

• Financial or serious crimes disqualify the borrower.

• Repeat criminal history may be considered with a letter of explanation.

Interest Reserves

Interest reserves are funds held in escrow to cover initial monthly interest payments. This protects both borrower and lender by reducing the risk of payment disruption during rehab.

Financed Interest Payments

To support liquidity for Texas real estate investors, you may be eligible for financed interest payments—meaning no monthly interest bills during the term. Instead, accrued interest is added to your final payoff.

Example:
Total loan amount: $100,000
Interest rate: 12%
Months to payoff: 9
Accrued interest: $9,000
Final payoff:
Unpaid principal balance: $100,000
Unpaid interest: $9,000

Property Sourcing Guidelines

When sourcing properties in the vast and varied Texas market, the following standards apply:

• New market purchases must be supported by a General Contractor agreement or a written explanation for DIY approach

• Wholesale deals, resale spikes, and non-arm’s length transactions will need extra documentation

• Condos, conversions, and major rehab projects may require architectural or engineering letters (or permits)

• Required documents:

  • Purchase contracts

  • Settlement statements

  • Payoff letters (if applicable)

  • Track record documentation

  • Entity formation paperwork

Bridge Loan Insurance Guidelines

Every Texas property under construction, undergoing rehab, or held vacant must be insured properly. This includes both physical coverage for the property and liability coverage for incidents occurring on-site. Known as “Builders Risk Insurance,” it’s a specialized policy designed for properties in transition.

Coverages and Limits

Coverage Details

💡 Pro tip: As soon as you take ownership of the property, install smoke detectors, locks, and cameras. These measures help with policy compliance and protect you from denied claims.

Frequently Asked Questions

What states does OfferMarket fund bridge loans?

We fund bridge loans in nearly every U.S. state, including Texas, where we support real estate investors in cities like Houston, Dallas, Austin, and beyond.

We also serve:
Alabama, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming

(* In some states, we act as a referral service if local licensing is required.)

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

Yes. It’s common for our clients—including those investing across multiple cities in Texas—to have more than one bridge loan open at once.

However, we’ll assess your liquidity and project pace to ensure you’re not taking on more than you can handle. Our goal is to support sustainable growth—not overextension.

Are bridge loans commercial?

Yes. A bridge loan is considered a business purpose loan. Since it is issued to your legal entity and not you personally, it qualifies as commercial, not consumer, lending.

What is the minimum loan amount?

Our Texas bridge loans start at $25,000, making them accessible for everything from small-town flips in East Texas to entry-level multifamily projects in Houston or Fort Worth.

Which property types are eligible?

We finance non-owner occupied 1 to 4 unit residential real estate across Texas, including:

• Single-family homes

• Duplexes, triplexes, and fourplexes

• Townhomes and condominiums

• Planned unit developments (PUDs)

Note:

• Mixed use 2–4 unit, 5–9 unit mixed-use, and 5–9 unit multifamily projects fall under separate programs

• We do not finance 10+ unit buildings or commercial-use only properties under this bridge loan program

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

For Texas bridge loans, we most commonly refer to Loan-to-After-Repair-Value (LTARV). This is the total loan amount (purchase + rehab funds) divided by the appraised after-repair value.

We base the initial advance on the lower of either:

• Your contract purchase price

• The As Is value from our appraisal or in-house valuation

This keeps your project well-leveraged and ensures we’re lending conservatively and safely—even in rapidly appreciating markets like Austin or San Antonio.

What are the credit requirements?

We require a minimum FICO score of 680 for all guarantors on the borrowing entity. Exceptions may be made down to 660 for strong applicants with solid liquidity and track records.

We only review the scores of those who are guaranteeing the loan—other members of the entity are not evaluated.

What are the experience requirements?

We don’t require experience to qualify for a Texas bridge loan. That said, experienced borrowers are rewarded through our tiered system—with higher leverage and access to more complex projects.

Once you submit your Track Record, we’ll verify past rehab deals by reviewing your settlement statements or operating agreements. We use this to place you in the correct experience tier, which can significantly affect your advance rates and eligibility for more involved rehabs.

Does being a wholesaler count towards experience?

No. If you were only a wholesaler in a past deal and didn’t personally manage the rehab or carry financial responsibility, it won’t count toward your experience tier.

We're looking for verifiable, hands-on execution of renovation projects when assessing your eligibility and leverage limits.

What documentation is required?

OfferMarket’s streamlined Loan File system helps you upload documents efficiently and reuse them for future projects. Here’s what you’ll need depending on whether it’s a purchase or refinance transaction.

Purchase Transaction Requirements

Refinance Transaction Requirements

Are there special requirements for loans over $1M?

Yes. For bridge loans between $1,000,000 and $2,000,000, we apply elevated underwriting guidelines, especially for borrowers in premium Texas markets like Dallas–Fort Worth or Houston’s luxury suburbs.

Glossary of Key Terms

Instant Bridge Loan Quote

Our private lending division, OfferMarket Capital LLC, is a trusted funding partner for residential real estate investors in Texas and beyond. We specialize in fast, flexible financing for investment properties—from fix-and-flip projects in Dallas to cash-out refinances in Corpus Christi.

Thousands of investors rely on OfferMarket every month. Becoming a member is free and gives you access to:

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

Let’s partner on your next deal and help you build wealth in Texas real estate — starting today.

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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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