Bridge loans and DSCR loans are two of the most common private-money products real estate investors use — and they serve very different purposes. Choosing the wrong one can cost you in rate, leverage, and flexibility. Here's how they compare.
Bridge / Fix-and-Flip Loans
A bridge loan is short-term financing designed to get you into a property fast and carry you through to an exit — a sale, a refinance, or a stabilization. They're typically 6 to 18 months, interest-only, and based on the after-repair value or purchase price rather than your personal income. The trade-off: higher rates, shorter terms, and leverage that's usually capped at 70–75% of ARV.
- Term: 6–18 months, interest-only
- Leverage: up to 70–75% of ARV or purchase price
- Underwriting: property-driven, not income-driven
- Best for: acquisitions, fix-and-flips, time-sensitive deals
DSCR Loans
A DSCR (debt-service coverage ratio) loan is longer-term financing for cash-flowing rental property. Instead of qualifying on your personal income, the lender qualifies the loan on the property's rental income relative to the debt payment. If the rent covers the debt service — typically at a 1.20 or 1.25 ratio — you qualify. No personal income verification, no tax returns required.
- Term: typically 30-year amortization, 5–10 year terms
- Leverage: up to 75–80% LTV on cash-flowing 1–4 family and small multifamily
- Underwriting: property cash flow, not personal income
- Best for: buy-and-hold rentals, portfolio refinance, cash-out
Which one fits your deal?
If you're acquiring or rehabbing a property and need speed, a bridge loan gives you the runway to get in, fix it up, and figure out the exit. If you're stabilizing a rental and want long-term cash flow, a DSCR loan gives you terms that make sense for holding. Many investors use a bridge loan to acquire and rehab, then refinance into a DSCR loan once the property is rented — the BRRRR strategy.
HLD shops both products across multiple lenders. Every lender prices differently, offers different leverage, and has different DSCR minimums or ARV caps. We compare every LOI side by side — rate, leverage, fees, terms — and match it against what you told us you need. You see the full picture before you commit.
Want this kind of analysis on your deal? Book a 30-minute call — we'll walk through the numbers with you.
