Get a quoteSelling within a year? Don't sign a 30-year loan.
A DSCR loan has a lower rate, but it can take a month or more to close and often charges up to 5% if you repay early. A bridge loan closes in about a week and costs nothing to exit.
| Compare | F2 bridge loan | DSCR loan |
|---|---|---|
| Time to close | About a week | Often a month or more |
| Prepayment penalty | None. Only 30 days' interest at the end of repayment. | Commonly up to 5%, stepping down over five years |
| Term | 1 to 24 months | 30 years |
| Underwritten on | The property and your exit | Rent covering the mortgage payment |
| Property condition | Vacant, mid-project or just finished | Rented or rent-ready |
| Short-term rentals | Welcome, including Airbnb and Vrbo | Varies by lender. Many want a rental history. |
| Credit | FICO from 550. Foreign nationals. | Typically 620 to 660 and above |
| Interest rate | Higher | Lower |
The rate is not the cost.
What you pay depends on how long you keep the loan. Move the slider to your plan.
Choose a bridge loan when
- You plan to sell or refinance within a couple of years.
- You need to close in days, not weeks.
- The property is vacant, mid-renovation or just completed.
- Your existing loan is maturing and you need time to sell.
Choose a DSCR loan when
- The property is rented and you intend to hold it for years.
- You have time to wait for the closing.
- You are confident you won't sell or refinance during the penalty period.
Many borrowers use both: a bridge loan to buy and stabilize, then a DSCR loan once the property is rented.
Common questions
What is a DSCR prepayment penalty?
A fee charged if you repay a DSCR loan early. A common structure is 5% of the balance in the first year, falling by one point each year after.
Is a bridge loan cheaper than a DSCR loan?
For a short hold, it often is, because there is no exit penalty. For a hold of several years, the lower DSCR rate wins.
Can I refinance a bridge loan into a DSCR loan later?
Yes. There is no prepayment penalty on an F2 bridge loan, so you can refinance whenever the property qualifies.
Can I get a bridge loan on an Airbnb or short-term rental property?
Yes. We lend on properties that are, or will be, let on Airbnb, Vrbo and similar platforms. A bridge loan can fund the purchase and set-up before the property has the rental history a DSCR lender may ask for.