Bridge-to-Perm Loan Rates 2026
Two-Phase Pricing Explained for Borrowers
Bridge-to-perm loan rates in May 2026 carry two distinct pricing components: a floating construction or bridge rate of 7.00% to 10.50% (SOFR plus 250 to 400 basis points) during the build or stabilization period, and a permanent rate of 5.50% to 7.25% that is locked at origination and activates at conversion. The core borrower benefit is eliminating refinance risk by securing the permanent take-out before construction begins, even as the floating bridge rate fluctuates with SOFR over the intervening months. Forward commitments are available through Fannie Mae, Freddie Mac, life companies, and regional banks, with pricing on each phase reflecting the respective risk profile of that component.
Current Rate Table
Rates shown are indicative ranges based on current market conditions. Your actual rate will depend on your specific property, leverage, and borrower profile. Contact Commercial Lending Solutions for a precise quote.
| Leverage Tier | Rate Range | Notes |
|---|---|---|
| Bridge Phase, Conservative (55% to 60% LTC) | 7.00% to 8.25% | Lower leverage construction or bridge draw facility, strong sponsorship |
| Bridge Phase, Standard (65% to 70% LTC) | 8.25% to 9.50% | Most common range for multifamily and mixed-use construction bridge |
| Bridge Phase, Higher Leverage (70% to 75% LTC) | 9.50% to 10.50% | Requires strong market, experienced sponsor, and solid permanent commitment |
| Permanent Phase, Agency Forward (Fannie Mae or Freddie Mac) | 5.50% to 6.25% | Rate locked at origination, activates upon stabilization and conversion |
| Permanent Phase, Life Company or Bank | 6.00% to 7.25% | Balance sheet permanent commitment, fixed for 5 to 15 years at conversion |
Rates are illustrative ranges as of May 2026 and subject to change. All loan programs subject to underwriting approval. Not a commitment to lend.
What Drives Bridge-to-Perm Loan Rates
Understanding these factors helps you position your deal for the best available rate.
Forward Commitment Rate Lock Mechanics
The permanent rate is locked at origination, not at conversion. That lock premium is priced into the permanent spread at close, typically 15 to 40 basis points above a spot permanent loan, reflecting the lender's interest rate risk over the construction window. The longer the construction period, the wider the forward commitment premium.
SOFR Benchmark During the Bridge Phase
The construction or bridge facility floats over 30-day SOFR at a spread of 250 to 400 basis points. When the Fed moves rates, the bridge phase payment adjusts within days. Borrowers can buy interest rate caps on the floating component, which is often required by the permanent lender as a condition of the forward commitment.
Stabilization Risk and Conversion Trigger
Permanent lenders set specific conversion triggers, typically a debt service coverage ratio of 1.20x to 1.25x and occupancy of 90% to 93% for 90 days. Deals where the stabilization underwriting is aggressive, thin market absorption, or lease-up timelines are extended will price wider on both phases because conversion risk is higher.
Property Type and Permanent Lender Program
Multifamily projects with a Fannie Mae or Freddie Mac forward commitment achieve the tightest permanent spreads because agency pricing is transparent and the commitment is highly reliable. Mixed-use, industrial, or retail projects relying on life company or bank balance sheet commitments carry wider permanent spreads and more negotiated conversion conditions.
Sponsorship, Guaranty Structure, and Track Record
Most bridge-to-perm lenders require a completion guaranty and often a repayment guaranty through conversion. Sponsors with a demonstrable history of delivering projects on time and within budget can negotiate recourse burn-off provisions and tighter bridge spreads, sometimes 50 to 75 basis points below first-time developer pricing.
Construction Cost Certainty and Contractor Credentials
Lenders underwriting the construction phase price in cost overrun and schedule risk. Projects with a fixed-price contract from a bonded general contractor, funded contingency reserves of 5% to 10% of hard costs, and a completed set of plans and permits will price meaningfully tighter than projects still in pre-construction.
Loan Size and Market Liquidity
Loan sizes below $5 million have fewer competitive forward commitment sources, which can widen permanent spreads by 25 to 50 basis points relative to larger loans where multiple lender types actively compete. Primary markets with deep agency execution (Los Angeles, Dallas, Miami) price tighter than tertiary markets with limited permanent lender appetite.
Get a Rate Quote for Your Deal
Commercial Lending Solutions works with 1,000+ lenders. We find the sharpest pricing for your specific transaction.
How Bridge-to-Perm Loan Compare to Alternatives
Choosing the right loan structure can mean a 100 to 300 basis point difference in your cost of capital. Here is how current rates compare across loan types.
| Loan Type | Current Rate Range | When to Use vs Bridge-to-Perm Loan |
|---|---|---|
| Standalone Construction Loan plus Separate Permanent Refinance | Bridge phase 7.50% to 11.00%, permanent refinance at market rate at completion | Standalone construction gives flexibility to shop the permanent loan at stabilization but exposes the borrower to rate risk and refinance execution risk at the worst possible time, when the project is newly stabilized and capital markets may have moved. Bridge-to-perm eliminates that risk by locking the permanent rate now, at the cost of a modest forward commitment premium. |
| Standalone Bridge Loan | 7.50% to 11.50% floating | A standalone bridge loan carries no forward commitment and leaves the borrower to arrange permanent financing at stabilization. Pricing on the bridge itself is similar, but the borrower absorbs all refinance risk. Bridge-to-perm is the better structure when interest rate visibility matters more than flexibility. |
| Agency Permanent Loan (Fannie Mae or Freddie Mac) | 5.50% to 6.50% | Agency permanent loans require existing stabilization, typically 90% occupancy for 90 days. They cannot fund construction or lease-up. Bridge-to-perm uses the same agency programs as the permanent phase but adds the construction facility upfront, making it the path to agency execution for projects not yet stabilized. |
| HUD or FHA Construction to Permanent (221(d)(4)) | 5.25% to 6.00% all-in, fixed for 40 years | HUD 221(d)(4) offers the lowest long-term fixed rate available for multifamily construction and is a single-close structure similar to bridge-to-perm. The tradeoff is timeline, typically 12 to 18 months to close, Davis-Bacon prevailing wage requirements, and significant compliance overhead. Bridge-to-perm closes faster and works for asset types HUD does not finance. |
| DSCR Permanent Loan | 6.50% to 9.00% | DSCR loans require a fully stabilized, income-producing property and cannot accommodate construction or lease-up phases. They are a take-out option after stabilization but are not a construction vehicle. Bridge-to-perm is appropriate when the asset needs to be built or stabilized before any permanent financing is possible. |
Bridge-to-Perm Loan Rates 2026: Frequently Asked Questions
What are current bridge-to-perm loan rates?
Bridge-to-perm loan rates in May 2026 have two components. The construction or bridge phase floats at 7.00% to 10.50%, priced at SOFR plus 250 to 400 basis points depending on leverage and sponsorship. The permanent phase rate is locked at origination and ranges from 5.50% to 7.25% depending on the permanent lender program, property type, and loan term selected.
When is the permanent rate locked in a bridge-to-perm loan?
The permanent rate is locked at origination, before construction begins, not at the time of conversion. This is the defining feature of the program. The borrower receives a forward commitment from the permanent lender specifying the rate, term, and conversion conditions at the same time the construction facility closes. A modest forward commitment premium of 15 to 40 basis points is typically embedded in the permanent rate to compensate the lender for holding that rate lock through the construction period.
What triggers conversion from the bridge phase to the permanent phase?
Conversion is triggered when the property meets the permanent lender's stabilization tests, which typically include minimum occupancy of 90% to 93% held for 60 to 90 consecutive days, a debt service coverage ratio of 1.20x to 1.25x based on actual income, and completion of all construction as verified by an independent inspector. Missing a conversion trigger can result in extension fees or, in worst cases, a maturity default on the bridge facility.
Is an interest rate cap required on the bridge phase?
Most permanent lenders issuing forward commitments require the borrower to purchase an interest rate cap on the floating bridge facility. The cap protects both the borrower's carry cost and the permanent lender's underwriting assumptions during the construction period. Cap strike rates are typically set 100 to 200 basis points above the SOFR index at origination, and the cap must remain in force through the conversion date.
What property types qualify for bridge-to-perm financing?
Multifamily is the most common property type because Fannie Mae and Freddie Mac offer standardized forward commitment programs for it. Mixed-use projects with a significant residential component also qualify. Life companies and regional banks provide forward commitments for industrial, self-storage, and select retail or office projects, though pricing is wider and underwriting is more negotiated for non-multifamily assets.
How does bridge-to-perm compare to HUD 221(d)(4) for multifamily construction?
HUD 221(d)(4) is also a single-close construction-to-permanent program and typically offers the lowest long-term fixed rate, around 5.25% to 6.00%, amortizing over 40 years. Bridge-to-perm closes in 60 to 90 days versus 12 to 18 months for HUD, has no Davis-Bacon wage requirements, and works for property types HUD does not finance. Borrowers who can meet HUD requirements and tolerate the timeline often prefer it for the rate, but bridge-to-perm wins on speed and flexibility.
What is a typical loan-to-cost for the construction phase of a bridge-to-perm loan?
Construction phase loan-to-cost typically ranges from 55% to 75% of total project cost, including land, hard costs, soft costs, and interest reserves. The permanent forward commitment is sized to a loan-to-value of 65% to 75% of stabilized appraised value. If the stabilized LTV is lower than the construction LTC, the borrower may need to pay down the loan at conversion, so pro forma underwriting of both phases must align from the start.
Trevor Damyan is a commercial mortgage broker with $1B+ in loans closed and direct relationships with life insurance companies, CMBS desks, debt funds, and non-QM lenders. Rate data is compiled from active lender conversations and closed transaction experience.
Ready to Lock Your Rate?
Submit your deal details and get a competitive rate quote within 24 hours. No obligation. No upfront fees.