Reviewed by Casa Academy and updated July 29, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.
Bridge Loan
A bridge loan is short-term financing that covers the gap between buying a new property and selling an existing one, usually secured by the buyer's current home or other collateral until permanent financing or sale proceeds arrive.
Exam context
Identify bridge loans as temporary, not permanent financing. Questions may ask what happens if the first home does not sell: the borrower must still repay or extend the bridge under new terms.
Typical structure
Bridge loans last from a few months to about a year with higher interest rates and fees than long-term mortgages. Lenders expect repayment from the sale of the prior residence or from refinancing into a conventional first mortgage after the sale closes.
When buyers use them
In tight inventory markets, buyers bridge equity so they can make a non-contingent offer on a new home before their current listing sells. Risk rises if the old home stays on the market longer than projected. Some lenders require both properties as collateral.
Examples
Move-up purchase
Owners tap $120,000 of equity through a bridge loan to fund the down payment on a new house while their prior home is listed.
Commercial rollover
An investor uses a bridge loan to acquire a retail center while arranging long-term CMBS financing over the next nine months.
Keep studying
Related terms
- Balloon loanNotes with a large final payment at maturity.
- Blanket mortgageOne loan covering multiple parcels with release clauses.
Related resources
- Free exam prep
Practice related licensing questions with instant feedback.
- Real estate glossary hub
Browse all published national glossary entries.
- Florida exam topic hub
Florida-specific explainers and question sets for this topic area.
Sources
- CFPB: closing on a home(Consumer Financial Protection Bureau)