Bridge Loan

Short-term, higher-rate financing used to acquire and stabilize a park before a longer-term refi.

A bridge loan is a short-term loan (typically 12 to 36 months) used to finance the acquisition of a value-add park while the operator stabilizes operations, completes infill, and prepares the asset for an agency or CMBS refinance. Bridge loans carry higher interest rates (often 200 to 400 basis points above agency) and shorter amortizations, but offer flexibility on occupancy requirements that agency lenders won't tolerate. The bridge-to-agency play is a standard value-add strategy in MHP investing.

Related Terms

Agency Loan

A loan backed by Fannie Mae or Freddie Mac — the most common financing for stabilized parks.
Capitalization Rate (Cap Rate)

A property's annual NOI divided by its purchase price, expressed as a percentage.
CMBS Loan

A commercial mortgage-backed security loan — bond-financed and typically with stricter prepayment terms.

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