Chicago's two-flats, three-flats and six-flats make Illinois a natural market for large bridge loans. A few buildings bought together, or one renovated six-flat in Logan Square, can easily pass $1M.
In short: LendingStreet funds Illinois bridge loans from $1M to $5M+ on 1-8 unit investment properties, with rates from 7.99% and closings in as little as 10 days. Larger balances are reviewed case by case and usually need a full valuation. Illinois investors use them for Chicago multi-flat buildings, high-value homes on the North Side and in the suburbs, and rental packages, then refinance into DSCR or jumbo DSCR loans.
On the North Side, Lincoln Park, Lakeview, Bucktown and Wicker Park have single homes above $1M and higher-end multi-flats. Logan Square, Avondale, Albany Park and Pilsen have two- to six-flat buildings that investors buy and renovate. On the South Side, Bronzeville and Hyde Park have greystones and multi-unit buildings.
In the suburbs, Evanston, Oak Park, Wilmette and Hinsdale have higher-value homes, and Berwyn and Cicero have two-flats. Downstate, investors buy student rentals in Champaign-Urbana and Bloomington-Normal and rental groups in Peoria and Springfield.
| Area | Typical $1M+ bridge collateral | Local issue to check |
|---|---|---|
| Lincoln Park, Lakeview, Bucktown | High-value homes, renovated multi-flats | Jumbo DSCR leverage and taxes |
| Logan Square, Avondale, Pilsen | 2-flats to 6-flats | Permits and renovation scope |
| Bronzeville, Hyde Park | Greystones and multi-unit buildings | Condition and tax reassessment |
| Evanston, Oak Park | Homes and small buildings | Local rental licensing |
| Champaign-Urbana | Student rental groups | Lease cycle and occupancy limits |
Illinois files at this size usually involve:
Bridge loans start at $150,000 and go to $5M+, rates from 7.99%. Above $1M nothing about the product changes, but the review gets deeper. Expect questions about your track record, reserves after closing and how you will repay.
Unlike some smaller bridge files, a large balance usually needs a full valuation. Order it the day terms are accepted and a 10-day close stays possible. The loan is interest-only for a short term while you sell, lease or refinance.
Cook County reassesses property on a three-year cycle by region, and Illinois property taxes are paid in arrears, meaning the bill you pay this year is for last year. At closing, sellers usually credit buyers for taxes owed, and the next reassessment can raise the bill. Budget taxes on the expected new assessment, not just the last bill.
Illinois and Cook County charge transfer taxes, and Chicago adds its own, much larger, transfer tax that is mostly paid by the buyer. On a $1.5M purchase the city tax alone is a large closing cost. Several suburbs also have their own transfer taxes.
Cook County homeowner exemptions do not apply to rental buildings, though a two-flat where the owner lives on site may have had one. If you are buying from an owner-occupant, expect that exemption to come off the bill.
This example is illustrative and not a quote. An investor buys a six-flat in Logan Square for $1,450,000. Two units are vacant and need full renovation, and the porches need repair.
The units and porches are finished, the building is fully leased, and it refinances on combined rent. The refinance at 70% LTV comes to $1,155,000, which repays the $1,087,500 bridge balance and returns about $67,500.
Taxes are budgeted on a higher expected assessment rather than the seller's bill. Max LTV on a 6-unit building varies by program, so this example stays at 70%.
| Line item | Amount |
|---|---|
| Bridge loan | $1,087,500 |
| Estimated monthly interest-only payment | $9,516 |
| Hold period | 9 months |
| Value at refinance | $1,650,000 |
| DSCR loan at 70% LTV | $1,155,000 |
| Estimated principal and interest | $7,977 |
| Taxes | $1,900 |
| Insurance | $520 |
| Total monthly payment | $10,397 |
| Monthly rent | $12,000 |
| DSCR | 1.15x |
Chicago's Residential Landlord and Tenant Ordinance has strict rules on security deposits, interest and notices, and mistakes can be costly. Many investors use a property manager familiar with it. Some suburbs, including Evanston and Oak Park, require rental licenses and inspections.
Chicago requires short-term rental registration, and some buildings and precincts restrict or prohibit them. Most investors buying multi-flats plan on long-term leases. Where short stays are allowed, some programs can use projected short-term rental revenue.
Many Chicago multi-flats have shared utilities, such as one boiler or one water meter. Owner-paid utilities are a real cost even though they are not part of the DSCR payment, so look at a year of bills before you buy.
Many Chicago multi-flats are 80 to 120 years old, with boilers, older wiring, masonry and back porches that need inspection. Chicago enforces porch safety rules, and older wood porches are a common repair item.
Exterior masonry and roof work is easier in warmer months, while interior work can continue through winter. Plan the bridge term around the work you need to finish, and keep reserves for heating costs if the owner pays for heat.
A six-flat stays in our 1-8 unit residential programs. Buildings with nine or more units are commercial and covered on our multifamily loans page.
A bridge buys time. The plan for that time should end in a sale or in a 30-year DSCR or jumbo DSCR loan sized on lease income, with LLC borrowers standard and no tax returns. Minimum DSCR on standard programs is 1.0x and minimum credit is 620.
Know your target refinance amount on day one. If the refinance will not cover the bridge payoff, plan the cash you will bring or the property you will sell.
Send the following and we can usually issue terms quickly and order the valuation right away:
Bills are paid in arrears and reassessed on a three-year cycle, so the bill can rise after a sale. Budget on the expected new assessment.
The city tax is mostly paid by the buyer, in addition to state and county taxes. Confirm amounts with your title company.
Yes. Each is a 1-8 unit property, and the group can refinance into a blanket loan or separate DSCR loans.
For our programs, up to eight units is residential. Nine or more units is commercial.
In most cases. A seven-figure balance usually needs an appraisal or similar report, so we order it as soon as terms are accepted.
Often 10 days to a few weeks, depending on valuation scheduling, title and how many properties are in the deal.
The program runs to $5M+ on 1-8 unit investment property, with larger requests reviewed case by case.
A sale, or a refinance into a DSCR or jumbo DSCR loan that qualifies on rent instead of personal income.
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