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CRE Bridge vs CRE Permanent Loan

Q: When is a property actually stabilized enough for permanent financing?

When its income is real and provable, not projected. Permanent lenders underwrite in-place income with a leasing history. A building at 60% occupancy with signed letters of intent is a bridge deal; the same building at 90% with seasoned leases is a permanent deal. Bridging the gap between those two states, on a term up to 24 to 36 months, is exactly what CRE bridge is for.

Q: What does bridge cost compared to permanent?

More, and it should. Our CRE bridge program starts from 9.00% interest-only, while permanent financing carries market permanent rates, which are materially lower. You are paying for speed, for leverage against a property that is not yet stabilized, and for a lender willing to underwrite the business plan instead of the rent roll. Carry it only as long as the plan takes.

Q: What does "stabilized" mean to a commercial permanent lender?

It's an occupancy and performance test, not an opinion. Fannie Mae's DUS program looks for stabilized occupancy, typically 90%, held for 90 days before it will fund, and a property that hasn't cleared that bar is considered case by case. Until it clears, the permanent quote isn't available, which is the gap a CRE bridge loan is built to cover.

Q: Why does a permanent loan's exit cost more than a bridge's?

Because you're not meant to leave early. A CRE bridge loan is structured to be paid off at refinance or sale, so it doesn't carry a long-dated exit cost. Agency permanent programs are priced for a decade or more and typically use yield maintenance, a lockout, or defeasance to protect that yield, so read the prepayment structure before you close, not after.

One finances the plan. The other finances the result.

The choice isn't lower-cost versus higher-cost, it's whether the property's current income can pass a permanent lender's tests today. Permanent lenders underwrite in-place NOI against LTV, DSCR, and debt yield, and agency programs want the asset already stabilized, so a property mid-lease-up or mid-renovation can't be sized yet. A CRE bridge loan funds that gap: short, interest-only, priced for risk, and built to be paid off. Once the asset performs, the permanent loan is what you live with, which is why its exit terms matter as much as its rate.

CRE Bridge

Value-add, pre-stabilization

CRE Permanent

Stabilized, long-term hold

Property condition

Value-add, pre-stabilization

Stabilized commercial

Loan amount

Up to $10M

Sized by program, not preset

Term

Up to 24 to 36 months

Long-term permanent

Payments

Interest-only

Amortizing

Max leverage

Up to 75% LTV

Program-specific, by LTV, DSCR, debt yield

Exit

Paid off at refinance or sale

Yield maintenance, defeasance, or declining premium

Bottom line

A CRE bridge loan finances the business plan; a CRE permanent loan finances the result. Take the bridge when the asset can't yet clear a permanent lender's occupancy and coverage tests, then term out once it can, which is the path USAM runs, bridging the deal and placing the permanent debt in house through agency multifamily, insurance, and wholesale channels. Read the permanent loan's exit terms before you sign a decade of them.

Rates and terms shown are typical figures, subject to underwriting and market conditions. Not a commitment to lend.

Common questions

How much leverage does each one give me?

Our CRE bridge program goes to 75% LTV on loans up to $10M. Permanent financing is sized to the stabilized property's income rather than to a single published cap, through agency, insurance company and wholesale programs. Bridge is the higher-leverage, shorter instrument; permanent is the lower-rate, longer one. Most commercial deals use both in sequence rather than choosing once.

When is a property actually stabilized enough for permanent financing?

When its income is real and provable, not projected. Permanent lenders underwrite in-place income with a leasing history. A building at 60% occupancy with signed letters of intent is a bridge deal; the same building at 90% with seasoned leases is a permanent deal. Bridging the gap between those two states, on a term up to 24 to 36 months, is exactly what CRE bridge is for.

What does bridge cost compared to permanent?

More, and it should. Our CRE bridge program starts from 9.00% interest-only, while permanent financing carries market permanent rates, which are materially lower. You are paying for speed, for leverage against a property that is not yet stabilized, and for a lender willing to underwrite the business plan instead of the rent roll. Carry it only as long as the plan takes.

What does "stabilized" mean to a commercial permanent lender?

It's an occupancy and performance test, not an opinion. Fannie Mae's DUS program looks for stabilized occupancy, typically 90%, held for 90 days before it will fund, and a property that hasn't cleared that bar is considered case by case. Until it clears, the permanent quote isn't available, which is the gap a CRE bridge loan is built to cover.

How is a CRE bridge loan sized differently than a permanent loan?

A bridge is sized to the plan, a permanent loan is sized to the income. USA Mortgage's CRE bridge goes up to 75% LTV and up to $10M, priced against the deal and the exit. A permanent loan is underwritten against in-place NOI through LTV, DSCR, and debt yield, all program-specific, so the same property can size very differently once it's actually renting.

Why does a permanent loan's exit cost more than a bridge's?

Because you're not meant to leave early. A CRE bridge loan is structured to be paid off at refinance or sale, so it doesn't carry a long-dated exit cost. Agency permanent programs are priced for a decade or more and typically use yield maintenance, a lockout, or defeasance to protect that yield, so read the prepayment structure before you close, not after.

Related comparisons

Bridge Loan vs DSCR LoanShort-term capital to reposition, then long-term money to hold.DSCR Loan vs Hard Money LoanLong-term rental financing versus short-term project capital.

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