Lexington has a hard deadline that many investors plan around: student leases start in August. A building bought in spring with vacant or poorly managed units has a few months to be fixed and leased before the next school year. Bridge financing is built for that kind of short, defined window.
In short: LendingStreet offers residential bridge loans on 1-8 unit investment properties in Lexington and central Kentucky from $150,000 to $5M+, with rates from 7.99%. The loans are short-term and interest-only, can close in as little as 10 days, and some programs require no appraisal. Most investors exit by refinancing into a DSCR loan or by selling.
The most common Lexington bridge loan is an acquisition of a rental that is not ready for long-term financing yet: a duplex near campus with one side vacant, a small building with leases well below market, or a house that needs light work before it can rent. A long-term DSCR loan sizes on current rent, which is low or zero; a bridge loan sizes on the purchase and the plan.
Bridge loans also help investors who need to close fast at an estate sale, buy before selling another property, or take over a property from an out-of-town owner who wants a quick, clean close.
Speed also matters in competition. Well-located campus-area duplexes and small buildings often have several interested local buyers, and a seller choosing between offers frequently favors the one that can close quickly and with fewer contingencies.
Bridge terms are consistent across the metro.
Pricing within the program depends on leverage, experience and the property.
This example is illustrative and not a quote. In March, an investor buys a duplex a few blocks from campus for $345,000. One side is vacant and the other is leased month to month. A 75% bridge loan of $258,750 carries estimated interest-only payments of about $2,264 a month while the investor updates both units with cash from reserves.
By August both units are leased for the school year at $2,050 each, or $4,100 a month, and the duplex appraises at $425,000. A 75% DSCR refinance of $318,750 pays off the bridge loan. Estimated principal and interest is about $2,174, with taxes of $390 and insurance of $170, for a payment of $2,734 and a DSCR of about 1.50x.
| Stage | Loan | Monthly payment | Notes |
|---|---|---|---|
| Bridge, March to August | $258,750 | $2,264 interest-only | Updates and lease-up |
| DSCR refinance | $318,750 | $2,734 with taxes and insurance | Both units on 12-month leases |
| DSCR at refinance | - | - | 1.50x on $4,100 rent |
Student housing near UK is usually leased months before the fall semester, and many students sign for the next year in winter or early spring. If you buy in late spring, you may be leasing to the tail end of the market. Plan the purchase so renovations finish in time to show units, and price rent for a building that is leased late rather than early. A bridge term with a few extra months protects you if one unit does not lease until September.
Remember the carrying costs beyond the loan payment. Utilities on vacant units, insurance, taxes and lawn care continue while you renovate and lease, so budget each month of the term in full. A cash cushion for one or two extra months of carry is a sensible part of any campus-area plan.
Lexington zoning limits the number of unrelated adults who can live in one dwelling in many districts, and some neighborhoods near campus have pushed for tighter enforcement. If your plan depends on adding bedrooms or leasing to more students per unit, confirm the limit for your address with LFUCG before you buy. The refinance appraisal will use market rent for a legal configuration.
Not every Lexington bridge loan involves students. Investors use them for estate-sale houses in Chevy Chase that need updates before they can lease to families, for newer homes in Georgetown bought ahead of a job relocation wave, and for small multi-family buildings where the plan is to raise below-market rents as leases expire. The structure is the same: buy, stabilize, refinance or sell.
Each of these is a short-term situation with a clear plan, which is exactly what a bridge loan is designed to carry.
Before you buy, check market rent for each unit, the PVA assessment and how it may change after your purchase, and an insurance quote that reflects the roof and electrical system. Those inputs decide whether the DSCR refinance clears 1.0x. Our bridge-to-DSCR guide covers timing and seasoning questions in more detail.
If the appraisal comes in below your target, you can bring cash to the refinance, wait a few months for more rent history, or look at our sub-1.0 DSCR programs where they fit. Leaving room in your bridge term keeps all three options open.
If the plan is a heavy rehab with draws, a fix and flip loan usually fits better because it can fund up to 100% of rehab on some programs. If the property is close to rentable and the main need is speed or time to lease, a bridge loan is simpler. Both are short-term and interest-only.
Some investors also use a bridge loan for a light refresh and then a fix and flip loan on a later, heavier project, keeping each property on the financing that matches its plan.
Our investor loans are business-purpose loans on non-owner-occupied property. Send the address, price, current rents and your plan through the form below or call (877) 298-1001. Tell us your closing deadline so we can line up title and insurance. For statewide information, see our Kentucky bridge loan page.
In as little as 10 days with a complete file and clear title.
Bridge rates start from 7.99%. Your pricing depends on leverage, experience and the property.
Some bridge programs do not require an appraisal. Others do, depending on size and leverage.
Yes, if it is a legal rental under zoning occupancy limits. The refinance is sized on market rent for that legal configuration.
That is why a little extra term helps. You can lease mid-year or refinance once the unit is occupied.
1-8 unit residential investment properties. Nine or more units go to our commercial programs.
Yes. That is the most common exit once the property is leased.
Yes. We lend across the Lexington metro and central Kentucky.
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