Maximum LTV for Commercial Real Estate Bridge Loans

In this guide, we’ll provide the typical maximum loan-to-value for various commercial real estate loans funded by private lenders, including acquisition bridge loans, refinance bridge loans, rehab value-add projects, and ground-up construction.

The maximum leverage can vary widely based on the asset class, the loan type, the property’s location, and the market conditions at the time of funding. This guide was written in January 2022, in a strong real estate market with record-low interest rates.

Max Leverage for Refinance Bridge Loans

The maximum LTV is 75% for industrial, multifamily, and mixed-use properties which are majority multifamily. It may be possible to go that high for office, retail, and self-storage properties, but most lenders will max out at 70% for these 3 asset classes. For non-core assets such as hotels, healthcare, assisted living and others, the maximum LTV is 65%.

There are some exceptions to these numbers. For example, lenders that are very comfortable with hotels may lend up to 70% LTV for a refinance bridge loan. Some lenders max out at 65% LTV for all asset classes and loan types. There are also a few bridge lenders that consider vacant land as collateral, and the maximum LTV for land is typically 50% of the as-is value. If the land is not entitled, the maximum could be lower.

If you really need to get higher leverage for your deal, a small number of CRE private lenders provide mezzanine financing in 2nd lien position behind another lender, and the maximum combined LTV may be as high as 85%. Mezz financing is not commonly offered for a refinance; it’s more popular in acquisitions.

One final thing to note about refinance bridge loans – if the loan request includes any cash-out funds, many lenders become more conservative and reduce their maximum LTV by at least 5%.

Max Leverage for Acquisition Bridge Loans

For a stabilized commercial property with no major rehab or value-add component, the maximum leverage is typically the same as refinance bridge loans:

  • Multifamily, Industrial, Mixed-Use Multifamily: 75% LTP
  • Office, Retail, Self-Storage: 70% LTP
  • Hotel, Healthcare, Others: 65% LTP

When we talk about leverage for acquisitions, we prefer to use the term loan-to-purchase price instead of loan-to-value, just to be clear that the price is the value. If you feel the value is much higher than the purchase price, it likely won’t affect the maximum leverage. You’ll still need to contribute 25% to 35% equity to the deal in the form of cash or equity in another investment property.

Max Leverage for Value-Add Projects

When an acquisition bridge loan is for a value-add project, the loan-to-purchase price is typically higher for multifamily, but not so much for other asset classes. We know a number of bridge lenders that fund up to 85% of the purchase for a multifamily property, plus 100% of the renovation budget, so long as the loan amount does not exceed 75% of the completed value.

You’ll find a similar structure with other asset classes, but with slightly lower leverage. Some bridge lenders max out the renovation budget at the same number as their loan-to-purchase price. For example, 75% of the purchase price, and 75% of the renovation budget. So the borrower/sponsor would have to contribute 25% of the total project cost in cash.

It may be possible to get mezzanine financing to increase the leverage. As stated earlier, the maximum combined LTV for mezzanine financing is 85%, and there are a number of creative ways to structure deals with a Mezz loan.

Max Leverage for Ground-Up Construction

The maximum leverage for ground-up construction projects is much more conservative. Most lenders max out at 75% of the construction costs.

Even if the land is owned free-and-clear and has lots of equity, the developer (borrower) typically needs to contribute at least 25% cash to the deal, while also maintaining cash reserves, in case the project goes over budget.

The majority of private lending firms that offer construction financing will only consider funding the vertical phase, once the project is shovel-ready. However, there are some lenders that will fund the horizontal land development or even the land acquisition along with the construction financing. In these cases, most lenders max out at 50% LTV for land, so the developer’s down payment would be 50%.

We know a few lenders that offer up to 65% of the land acquisition, but only if the project is entitled and close to being shovel-ready. Some lenders that advertise a maximum LTV of 65% for land may be referring to “covered” land, which means the property has an old structure on it that will be torn down.

When the real estate market begins to slow down and values fall, lenders typically reduce their maximum loan-to-value by 5% to 15% just until values stabilize, and then they’ll slowly increase their leverage. If and when there’s a significant change in the maximum leverage ratios, we’ll update this guide to keep you informed.

How to Find CRE Private Lenders

One thing that can be frustrating when you’re researching lenders online is many of them don’t break down their maximum leverage by deal type or property type. For example, a lender may state the maximum LTV is eighty percent, but that may only apply to the acquisition for a value-add project and not for a standard purchase or refinance bridge loan. Some lenders do this with the goal of getting many brokers and investors to inquire so they can grow their database.

If you’re looking for a private lender to fund a commercial property deal, use our website as a resource. There is no fee to search for lenders and make contact with them directly.

  1. Start at the Browse Lenders page
  2. Select a Commercial loan type
  3. Type in a state or major metro area, and click SEARCH
  4. Click REFINE RESULTS if you want to filter the list
  5. View each lender’s profile to learn about their guidelines, pricing, and much more
  6. Click the green CONTACT button and reach out to the lender directly

We also have a great system to make your search for lenders more efficient. Click the ‘Create a Loan Request’ button to enter your deal information. Save it, then invite select lenders to view it, and they can message you directly through our platform. Please remind each company that you found them on

If you’d like some assistance with your lender search, you can click a button to request recommendations from us. We’ll view the deal and invite a few select lenders, some of which may not have a public profile on the site.

February 7, 2022