$5M Bridge Loan for Multifamily: Structure and 30-Day Closing Timeline

A $5M multifamily bridge loan is in the sweet spot of the debt fund market — large enough to attract institutional bridge lenders, small enough to be efficient (sub-$10M deals are often priced inside debt funds' minimum economics). This page covers structure, sponsor requirements, the 30-day close playbook, and exit planning. For broader product overview see commercial bridge loans; for rates see typical bridge loan rates 2026.

Common Use Cases for $5M Multifamily Bridge

• Value-add acquisition. Buying a 60–100 unit Class C property at 70–85% occupancy, repositioning to Class B over 12–18 months. Bridge funds acquisition + light renovation; refinance to agency (Freddie/Fannie) at stabilization.
• Lease-up bridge. Newly built or recently delivered property at 60–75% leased, need 6–12 months to reach stabilization (90%+ occupancy). Bridge funds the lease-up period; agency take-out at stabilization.
• Refinance off maturing debt. Existing CMBS or bank loan maturing in 60–120 days; agency refi can't close in time. Bridge buys 12–18 months to execute permanent financing.
• Cash-out refi for next deal. Pulling equity from a stabilized property to fund a new acquisition. Bridge structure if permanent take-out is planned within 12 months.
• Recapitalization. Partner buyout, restructure of existing capital stack.

Loan Structure: Senior vs Value-Add

Senior Bridge (Stabilized or Near-Stabilized)

• Rate: 9–11% fixed (or SOFR + 425–550 bps floating — floating tied to SOFR which is ~5.40% in May 2026, so floating all-in ~9.65–10.90%).
• Origination: 1–2 points = $50K–$100K at close on $5M.
• Exit fee: 0–0.5% ($0–$25K), often waived if refinanced with same lender's permanent group.
• LTV/LTC: Up to 65% LTV on stabilized; up to 70% on as-is value.
• Term: 12–24 months + 1–2 six-month extensions.
• DSCR: 1.10–1.25x on as-stabilized basis.
• Recourse: Often non-recourse with bad-boy carve-outs at debt funds; partial recourse at banks.
• Use case: 90%+ occupied property, refi-to-agency exit in 12–18 months.

Value-Add Bridge

• Rate: 10–12% fixed (or SOFR + 525–650 bps).
• Origination: 2–3 points = $100K–$150K on $5M.
• Exit fee: 0.5–1.0% ($25K–$50K).
• LTC: Up to 70–75% of total project cost (acquisition + renovation + closing + 6–12 mo interest reserve).
• Term: 18–36 months + extensions.
• Interest reserves: 6–12 months held back at close — reduces net proceeds. On $5M with 6 mo reserve at 11%: $275K reserved, $4.725M net to deal.
• Renovation budget: Released in draws (typically 3–5 draws) against completed work, inspected.
• DSCR: Sized to as-stabilized DSCR (1.25x+); current DSCR can be below 1.0x.
• Use case: Acquisition + renovation, lease-up from sub-80% occupancy.

See value-add bridge mechanics for the full structure.

Sponsor Requirements for $5M Multifamily Bridge

At $5M, debt fund lenders evaluate the sponsor as much as the asset. Realistic bar:

• Multifamily experience: 2–3 prior multifamily acquisitions, or 100+ units currently owned or recently sold. First-time multifamily sponsors at $5M typically need a strong KP (key principal) with track record or aggressive equity contribution.
• Net worth (outside the deal): $1M+, ideally 1x the loan amount. Strong sponsors with $5M+ net worth get better pricing.
• Liquidity (post-close): $500K–$1M+ in liquid assets after equity injection and closing. Reserves matter.
• Personal credit: 680+ FICO for KP and any guarantor. Bankruptcies in last 7 years are deal-killers for most lenders.
• Business plan credibility: Specific renovation scope, written rent comps, GC contract for renovation, detailed lease-up assumptions, exit plan with specific permanent lender targeted.
• Market knowledge: Lender wants to see you understand the submarket — rent growth, comparable sales, employer base.
• Equity injection: For 70% LTC bridge, sponsor brings 30% of total cost. On a $5M loan at 70% LTC of $7.15M total cost, sponsor brings ~$2.15M in equity. Equity must be sourced and seasoned (not borrowed from another loan).

The 30-Day Close Playbook

Debt fund bridge lenders can close in 30 days, but only with sponsor preparation. The 30-day clock starts on signed term sheet, not on first contact.

Pre-term sheet (days -14 to 0): Sponsor preparation

• Executed LOI or purchase contract with seller
• Sponsor financial package: PFS, 3 years personal tax returns, schedule of real estate owned (SREO), liquidity verification
• Track record memo: prior multifamily deals with addresses, units, hold periods, equity returned
• Subject property package: rent roll, T-12 financials, T-3 financials, property condition assessment, recent appraisal if available
• Business plan: acquisition strategy, renovation scope + budget, rent push assumptions, exit plan
• Initial term sheets from 3–5 bridge lenders for negotiation leverage

Days 1–7: Term sheet signed, third-party orders

• Sponsor signs term sheet, wires good-faith deposit ($25K–$75K, typically refundable if lender backs out, non-refundable if sponsor backs out)
• Order appraisal (multifamily appraisals run 2–3 weeks; rush available for ~$1K–$2K extra)
• Order Phase I environmental (typically 7–14 days)
• Order title commitment + survey update
• Order property condition assessment (PCA) if not done
• Lender's loan committee approval (typically within 5–10 days)

Days 8–20: Third-party reports + legal docs

• Appraisal, environmental, PCA, title come in (days 14–18 typical)
• Loan documents drafted by lender counsel
• Sponsor reviews docs with own counsel, negotiates final language
• Insurance binding (hazard, liability, BI, lender's loss payable endorsement)
• SPE entity setup if not already (most bridge loans require single-purpose entity borrower)

Days 21–30: Close and fund

• Final settlement statement
• Pre-close walkthrough of property (some lenders)
• Closing day: sign loan docs, fund equity + loan, record mortgage, disburse to seller
• Post-close: lender wires interest reserve and renovation reserve to controlled accounts

30 days is aggressive. 45 days is more typical; 60 days for complex deals. Anything under 30 days usually requires either (a) lender-rushed underwriting at premium pricing or (b) hard money / private money instead of institutional bridge.

Top $5M Multifamily Bridge Lenders

• Debt funds (institutional non-recourse, $5M–$50M sweet spot): Madison Realty Capital, BridgeInvest, Inland Mortgage Capital, Acres Capital, Pacific Western Bridge, Lument Capital, Greystone Bridge.
• Bank balance-sheet bridge (recourse, relationship-driven): Customers Bank, Eastern Bank, Pinnacle Bank, KeyBank Real Estate Capital (smaller bridge), regional community banks.
• Agency-friendly bridge lenders: Lenders like Lument, Greystone, Walker & Dunlop offer bridge with built-in path to their agency permanent — useful when your exit is Freddie SBL or Fannie Small Loan.
• Hard money / private money: Faster than institutional (7–14 days), higher cost (11–14% + 2–4 points), lower LTV (50–65%). For when 30 days isn't fast enough or sponsor profile doesn't fit institutional.

Permanent Take-Out: The #1 Lender Question

Bridge lenders care more about the exit than the going-in numbers. “How are you paying me back?” is the question they're underwriting. For $5M multifamily, the typical exits in 2026:

• Freddie Mac SBL (Small Balance Loan): $1M–$7.5M, 5/7/10-year fixed at ~5.75–6.75%, 30-year amortization, non-recourse. The most common $5M multifamily permanent exit. Originated by Arbor, Greystone, Walker & Dunlop.
• Fannie Mae Small Loan: Comparable structure to Freddie SBL, similar pricing.
• FHA 223(f): 35-year fully amortizing at ~5–6% fixed, 85% LTV, non-recourse. Slowest to close (6–9 months) but cheapest. For long-term hold.
• Bank conventional CRE: 6.5–8% fixed, 5- or 10-year fixed period with 25-year amortization. Recourse usually.
• CMBS: For larger stabilized portfolios; less common at exactly $5M.
• Sale: Some bridge sponsors plan to sell at stabilization rather than refinance. Both are legitimate exits.

Your business plan must show a realistic stabilized NOI that supports the permanent loan at typical agency LTV (70–75%) and DSCR (1.25x+). If the math doesn't work, the lender won't fund. See CRE permanent loan rates.

Total $5M Deal Cost (Real Numbers)

Example: $5M senior bridge at 10% + 1.5 points, 18-month term, 6-month interest reserve:

• Origination (1.5 pts): $75,000 at close
• Interest reserve (6 months): $250,000 held back
• Net loan proceeds at close: $4,675,000
• Monthly interest (post-reserve depletion, months 7–18): ~$41,667/month, paid from operations
• Total interest paid over 18 months: $750,000 ($250K from reserve + $500K from operations)
• Exit fee (0.25%): $12,500 at payoff
• Third-party costs: appraisal $5K, environmental $3K, PCA $3K, title $15K, legal $25K = $51K
• Total cost over 18 months: ~$888,500 on $5M = ~18% all-in cost (annualized ~12%)

Bridge is expensive on an annual cost basis. The justification is: (1) you can't get permanent yet (non-stabilized), (2) the value-add NOI lift refinances into a permanent loan worth materially more than the bridge balance, (3) you couldn't acquire the deal otherwise. The math has to work end-to-end — bridge cost + permanent loan + projected NOI lift > current acquisition cost.

Get Matched for a $5M Multifamily Bridge

The fastest way to find competitive $5M bridge pricing is to apply through a marketplace that submits to debt fund, bank, and agency-friendly bridge lenders in parallel. Get matched for a bridge loan — one application, multiple offers. Also see typical bridge loan rates 2026, value-add bridge mechanics, and bridge close timeline.