Bridge Financing for Land Purchase Before Your Construction-to-Permanent Loan

You found the perfect lot, but your builder isn’t ready and your Construction-to-permanent Loan can’t close yet. Meanwhile, the seller wants to move fast. This is exactly where bridge financing earns its keep. It buys you time—time to design, permit, finalize budgets, and lock in your construction-to-permanent (C2P) loan—without losing the land. I’ve helped dozens of clients pull this off smoothly; the key is structuring the bridge with your exit (the C2P) in mind from day one. Let’s walk through how it works, what it costs, and the traps to avoid.

What “Bridge Financing” Really Means for Land

People use “bridge loan” loosely, so let’s define it in the context of building a home:

• A bridge loan is short-term financing that lets you purchase and hold land until your construction-to-permanent loan is ready to fund and pay it off.
• It can be secured by the land itself, your current home, a mix of both (cross-collateralization), or other assets (like a securities-backed line of credit).
• Typical terms: 6 to 18 months, interest-only, higher rates and fees than long-term mortgages, and a clear exit strategy (your C2P loan).

This is different from:

• A land/lot loan: A bank or credit union finances just the land, often at lower rates than private bridge lenders, with 10–20 year amortization and a 3–5 year balloon. Not as fast, but cheaper if you qualify.
• A HELOC or cash-out refi on your current home: Often the cheapest “bridge” if you have equity and strong income. It can be your piggy bank to buy the lot in cash.

The goal is the same: control the land now, then roll it (and your plans, permits, and construction budget) into a single C2P closing later.

Why Bridge Financing Is Useful (and when it isn’t)

When a client tells me they’re considering a bridge, it’s almost always one of these reasons:

• Inventory is scarce and desirable lots move in days.
• Developer requires a land closing before you can submit architectural plans.
• Permitting/HOA design approvals will take months.
• Builder’s start date is a season away but the seller won’t wait.

When it may not be your best move:

• The construction lender can finance the land and construction in a single one-time close right now. If you can do it today, do it; it’s typically cheaper and cleaner than carrying interim debt.
• You’re stretching to qualify, and carrying two properties plus a bridge payment could jeopardize your approval.
• You haven’t finished land due diligence (more on that later). Don’t borrow money to buy a headache.

How Bridge Financing Fits with a Construction-to-Permanent Loan

Think of the C2P loan as your exit. You close once, the lender funds construction draws during the build, and then the loan converts to your long-term mortgage when the home is complete. When you buy the land before the C2P is ready:

• The land becomes part of your “equity” in the project.
• The C2P lender will order an appraisal “subject to completion” of plans and specs; they’ll add the appraised land value plus improvements to determine your maximum loan.
• Most lenders credit you for the land’s value, but many use “lower of cost or current appraised lot value” if you’ve owned the land less than 6–12 months. That seasoning detail can affect how much “equity” they give you credit for.

Common approach I recommend:

1. Secure the lot via bridge or HELOC.
2. Finalize plans, budget, and permit path.
3. Lock your C2P with a lender who understands the land’s value and will pay off the bridge at C2P closing.
4. Make sure your bridge maturity gives you enough runway to get permits and close the C2P.

Common Bridge Structures for Land (Pros, Cons, Costs)

Here are the most reliable routes I use with clients, ranked by typical cost:

1) HELOC or Cash-Out Refinance on Your Current Home

• What it is: You borrow against your current home’s equity to buy the lot in cash.
• Pros:
• Often the lowest rates (HELOCs can be prime + margin; many clients see mid–single-digit to low–double-digit APR depending on market).
• Flexible: Interest-only payments; you can draw only what you need for the lot and due diligence.
• Typically no prepayment penalty.
• Cons:
• You must qualify carrying your current mortgage, the HELOC, plus the future C2P payment (unless the lender excludes the HELOC if it will be paid off with sale proceeds).
• If you’ll keep your current home as a rental, expect tighter DTI requirements and potential reserve requirements (6–12 months of payments).
• Timing: 2–4 weeks to close (sometimes faster with your existing bank/credit union).
• Pro tip: Keep the HELOC open through construction as a contingency fund for overages or upgrades. C2P lenders sometimes allow subordinate financing for soft costs; verify in advance.

2) Lot/Land Loan from a Bank or Credit Union

• What it is: A standard land-only mortgage.
• Pros:
• Rates typically lower than private bridges.
• Local credit unions are often friendliest to owner-occupied residential lots with 20–30% down.
• Longer terms (10–20 years) reduce monthly carry.
• Cons:
• Slower underwriting.
• Strict LTV caps (60–80% LTV typical).
• Balloon payments; some don’t allow short payoffs without fees.
• Some lot lenders won’t allow a C2P lender to pay them off early without a fee, or they charge minimum interest (ask upfront).
• Timing: 3–6 weeks typical.
• Pro tip: Ask if they’ll convert the lot loan into a C2P with one-time close later. If yes, it can simplify things and save closing costs.

3) Cross-Collateralized Bridge (Existing Home + Land)

• What it is: The lender uses equity in your current home and the land you’re buying as collateral to fund the land purchase.
• Pros:
• Can reduce cash down because lender is secured by both properties.
• Can be tailored around your planned exit (either sale of current home or C2P closing).
• Cons:
• Legal complexity and closing costs increase.
• You’ll be juggling two properties with one lender holding both liens—make sure release terms are crystal clear.
• Timing: 2–4 weeks with a portfolio lender.
• Pro tip: Write into the note exactly what events trigger lien releases (e.g., payoff at C2P close or sale proceeds).

4) Private/Hard Money Land Bridge

• What it is: Short-term financing from a private lender specializing in speed and flexibility.
• Pros:
• Fast approvals and closings (5–10 business days possible).
• Lenders may underwrite the exit more than your income; helpful for self-employed borrowers.
• Will finance unique or rural properties others won’t touch.
• Cons:
• Higher rates: commonly 9–12%+ with 1–3 points upfront (market dependent).
• Short terms (6–12 months) and minimum interest provisions are common.
• Timing: 1–3 weeks typical; some can close in days with a clean title.
• Pro tip: Negotiate for no or low prepayment penalties and clarify minimum interest (e.g., 3 months) so you’re not surprised at payoff.

5) Seller Financing, Option, or Extended Escrow

• What it is: Seller carries part or all of the price, or agrees to an option/extended escrow to lock up the land while you permit.
• Pros:
• Often the cheapest and most flexible if the seller agrees.
• You can embed due diligence and permit contingencies into the option/escrow.
• Less pressure to close quickly.
• Cons:
• Many sellers need cash to move on; not always available.
• Requires a very clear, attorney-drafted agreement to protect both sides.
• Timing: Negotiable.
• Pro tip: If a seller won’t carry, propose an extended escrow with a nonrefundable deposit that goes hard after you clear key contingencies (soil, utility, title). Often works better than asking for financing.

6) Securities-Backed Line of Credit (SBLOC)

• What it is: A line against your investment portfolio (not retirement accounts).
• Pros:
• Fast, flexible, and low rates relative to hard money.
• Doesn’t show up as DTI in mortgage underwriting at many lenders if you can pay it off from assets.
• Cons:
• Market volatility risk—if your portfolio drops, lender can issue a margin call.
• Not for everyone; involves risk tolerance.
• Timing: A few days to 2 weeks.
• Pro tip: Keep LTV conservative (30–50%) to reduce margin call risk.

What Lenders Look For (and how to package your story)

Bridge lenders care about two things: collateral and exit. C2P lenders care about your full profile. Bring both to the table.

• Credit score: 680+ for many bank land loans; 720+ for best terms. Private lenders can go lower but price for risk.
• Income and DTI: For owner-occupants, expect your C2P lender to calculate DTI including:
• Payment on your current mortgage (unless selling prior to close and you can document a non-contingent sale).
• Bridge/HELOC payment (some will ignore if the HELOC is secured by your current home and you’ll close the C2P after sale; ask).
• Proposed construction interest or a qualifying payment (often 30-year P&I based on permanent loan terms or an imputed payment).
• LTV/LTC limits:
• Lot loans: 60–80% LTV.
• Private bridge on land: 50–65% LTV typical.
• C2P: 70–90% of the “as-completed” appraised value depending on program, occupancy, credit, and whether it’s primary vs second home.
• Reserves:
• Common: 6–12 months of total housing payments (current home + new home) for stronger profiles; more for self-employed.
• Documents:
• W-2s, pay stubs OR business returns and P&Ls for self-employed.
• Bank statements for down payment and reserves (60 days).
• Plans/specs, cost breakdown, builder contract (for C2P).
• Permits or at least permit pathway and timeline.
• Exit strategy:
• Show how the bridge is paid off: via C2P closing or sale of current home or both.
• Provide a realistic timeline. Lenders hate open-ended bridges.

How Much It Costs (Rates, Points, Fees, Carry)

These are ballpark ranges I see across markets. Your numbers will vary:

• HELOC: Prime-based. Many clients see APRs fluctuating with prime + margins (think mid–single-digit to low–double-digit APR depending on the rate cycle). Often interest-only with low or no closing costs.
• Lot loans: Often 0.5–2.0% higher than standard mortgages; 20–30% down, with closing costs similar to a mortgage (appraisal, title, doc fees). Some lenders charge a small origination fee.
• Private bridge/hard money:
• Rate: 9–12%+
• Points: 1–3% of the loan amount upfront
• Fees: $1,500–$3,500 in lender/junk fees is common
• Third-party: Appraisal ($600–$1,200), title/escrow ($1,000–$2,500), recording, survey if needed
• Minimum interest: 2–6 months common; negotiate this.
• Carrying cost example:
• Loan: $180,000 at 10% interest-only
• Monthly interest: $180,000 × 10% ÷ 12 = $1,500/month
• If you hold for 6 months: ~$9,000 interest + points/fees

Plan for soft cost cash too:

• Survey: $800–$2,500 (more for acreage/ALTA)
• Soil/perc test: $600–$2,500
• Geotech/engineering: $2,000–$10,000
• Architectural: $5,000–$50,000+
• Permits and impact fees: can range from $5,000 in rural areas to $50,000+ in some municipalities

The Critical Step Most People Skip: Land Due Diligence

Locking the land is only half the job. You also need to know the true build cost and feasibility. Here’s the due diligence checklist I insist on:

• Zoning and setbacks: Confirm you can build the home and accessory structures you want. Check height limits, lot coverage, and any overlay districts.
• Utilities:
• Water: City connection fees? Well depth estimates? Water rights?
• Sewer vs septic: If septic, get a perc test early; failed perc can kill a project or add $20k–$50k for engineered systems.
• Power: Distance to nearest transformer? Undergrounding required? Trenching cost?
• Gas: Availability and connection cost if you need it.
• Access and roads: Private road maintenance agreements, grade issues, winter access, legal easements. Title must show a recorded, insurable access easement if not on a public road.
• Topography and soils: Steep lots, rock, or expansive soils can add $25k–$150k in excavation, retaining, and engineering.
• Floodplain/wetlands: Check FEMA maps and local designations. Wetland buffers can constrain buildable area. Floodplain can trigger expensive foundations and insurance.
• HOA/ARC rules: Design guidelines can limit rooflines, require specific materials, dictate garage placement, etc. Some add $30k–$150k to costs.
• Title review:
• Easements, CCRs, mineral rights, encroachments.
• Existing liens or assessments.
• Boundary survey to confirm corners and encroachments.
• Environmental: Underground storage tanks, historic sites, endangered species zones can restrict development.
• Local impact fees: School, park, traffic fees can run five figures in many jurisdictions.

If your bridge period is short, push to complete these items during the seller’s escrow period with a strong but fair due diligence contingency timeline. I typically aim for 21–30 days on acreage and 10–21 days on a platted subdivision lot.

Timing: A Realistic Timeline That Works

Here’s a schedule I see work well:

• Week 0–1: Get pre-approved for the bridge and the C2P (or at least have both lenders vetted). Make an offer on the land with due diligence contingencies.
• Week 1–3:
• Order appraisal, title, survey (if needed).
• Start perc/soils, contact utilities for cost estimates.
• Engage architect/plan designer for preliminary site fit.
• Week 3–4: Clear contingencies; either close with bridge/HELOC or negotiate extended escrow if something pops up.
• Month 2–4:
• Complete plans and detailed cost breakdown with your builder.
• Submit for permits/HOA approval.
• Lock C2P lender, finalize application.
• Month 4–6 (varies widely by jurisdiction):
• Appraisal “subject to completion” (plans/specs).
• Receive permits/approvals.
• Close C2P, which pays off the bridge.
• Month 6–18: Construction draws, inspections, and conversion to permanent loan.

Always match your bridge term to your local permitting reality. If your city is running 16 weeks on plan review, a 6-month bridge is tight. Ask for 9–12 months with a low extension fee.

Case Studies With Real Numbers

Case 1: HELOC as a Low-Cost Bridge

• Situation: Marcus and Alina found a $210,000 lot. They have $450,000 equity in their current home with a $300,000 mortgage.
• Strategy: Get a $150,000 HELOC at prime + 0.75%, interest-only. Use $60,000 cash savings for the rest of the purchase plus due diligence.
• Costs:
• HELOC closing: $650
• Monthly interest at 9.25% on $150,000 (example rate): ~$1,156
• Due diligence: $8,400 (survey $1,200, perc $1,100, geotech $3,200, utility fees estimates/engineering $2,900)
• Timeline:
• Close lot in 3 weeks.
• Design + permits in 12 weeks.
• C2P approved at 80% of as-completed $1,050,000 appraisal.
• Land equity: They get credit for their $210,000 cost (owned <6 months). Combined with 10% cash down, they meet the 20% requirement.
• Outcome: HELOC paid down at C2P close and fully repaid when they sell their current home just before framing starts. Lowest total carry and minimal fees.

Case 2: Private Bridge for Speed on a Competitive Lot

• Situation: Danielle wants a view lot listed at $185,000 with multiple offers. Seller will choose the fastest close.
• Strategy: She uses a private bridge lender at 10.5% with 2 points, 12-month term, secured by the lot only (60% LTV). Down payment is $90,000 cash; loan is $95,000.
• Costs:
• Points: $1,900
• Lender fee: $1,500
• Appraisal: $800
• Title/escrow: $1,600
• Total upfront: ~$5,800
• Monthly interest: $95,000 × 10.5% ÷ 12 ≈ $830
• Timeline:
• Bridge closes in 9 business days.
• Danielle wins the lot.
• 4 months later, plans approved. Appraised “as-completed” value: $920,000; total budget $720,000; lender offers 85% LTC capped by 80% LTV.
• Bridge paid off at C2P close.
• Outcome: Higher cost than a HELOC, but without it she’d lose the lot. The C2P refinance wipes the slate clean.

Case 3: Lot Loan from a Local Credit Union

• Situation: Pete and Shay buy a $160,000 lot in a platted community. Their credit union offers 15-year amortization, 7.75% rate, 20% down.
• Strategy: Close the lot loan now; convert to a C2P program with the same lender later (one-time close at construction start).
• Costs:
• Down payment: $32,000
• Closing costs: $3,200
• Monthly P&I on $128,000 at 7.75%: ~$1,205
• Timeline:
• Close in 4 weeks.
• 5 months later, they’re permit-ready and the lender converts to C2P, rolling in soft costs and paying off the lot loan internally without a second closing.
• Outcome: Clean process, modest rate, and reduced closing costs. The trade-off was time; the credit union needed a full doc package and conservative underwriting.

Practical Tips That Save Money and Stress

• Get dual pre-approvals early: One from whoever will bridge the land, another from your C2P lender. Make them talk to each other if possible.
• Negotiate for time: Even 10 extra days in escrow can uncover a deal-killer before you borrow.
• Ask every land/bridge lender:
• Prepayment penalty?
• Minimum interest?
• Can the C2P lender pay this off at closing without fee?
• Will you subordinate to a C2P if needed?
• Keep title vesting consistent with C2P requirements: Many C2P lenders require you to hold title in your personal name or revocable trust. If you buy the lot in an LLC, you may have to deed it to your name later (possible transfer taxes).
• Don’t ignore taxes: Interest on a lot loan or bridge can often be capitalized into the property’s tax basis rather than deducted as home mortgage interest until the home is qualified residential property. Run this by your CPA.
• Overfund your contingency: Site work surprises are common. I advise 10–15% contingency on total hard costs; 20% on tricky lots.
• Re-run numbers post-due diligence: Update your all-in budget after soils, utility estimates, and initial engineering. Confirm you’ll still meet the C2P LTV cap.
• Rate lock strategy: Some C2P lenders can lock long (up to 12 months) with an upfront fee and Float-down options. Price the lock versus risk.

Step-by-Step: From Offer to Bridge to C2P

1) Clarify your budget and financing path

• Decide whether you’ll use a HELOC, lot loan, private bridge, or a combination.
• Get pre-approved with both the bridge provider and a C2P lender that’s comfortable with your builder, project type, and lot.

2) Make the land offer with smart contingencies

• Financing contingency: “Subject to buyer securing satisfactory interim financing or extended escrow.”
• Due diligence: Survey, soils/perc, utility confirmation, title review, HOA approval feasibility. Aim for 14–30 days depending on property type.
• Access: Include a specific clause that access must be insurable and recordable to the lot.
• Option if needed: If you can’t close yet, negotiate an option with a nonrefundable option fee that applies to purchase price, contingent on key feasibility items.

3) Lock your bridge path

• For HELOC: Start immediately; your bank may be slower than you think.
• For private bridge: Negotiate rate, points, term, minimum interest, and prepay. Get a written termsheet.
• For lot loan: Confirm early payoff policy and C2P conversion options.

4) Execute due diligence

• Order survey and soils/perc first—they take time and can kill deals.
• Title review: Ask for a copy of CCRs, easements, and any road maintenance agreements before your contingency expires.
• Utility letters: Written estimates or confirmations from water/sewer and power providers.

5) Close on the land

• Use a title company familiar with construction lending in your area.
• Verify vesting name matches future C2P requirements.

6) Finalize plans, specs, and budget with your builder

• Request a line-item cost breakdown, not just a lump sum. C2P lenders want detail by trade.
• Include allowances clearly (e.g., cabinets, fixtures) and leave room in contingency.

7) Apply for C2P

• Provide the full package: plans, specs, budget, builder resume, insurance, permits (or proof of submission), and your income/asset docs.
• Order the “subject to completion” appraisal and be available for appraiser questions.

8) Close C2P and pay off the bridge

• Confirm payoff statements and lien releases well before closing.
• Record the C2P mortgage and set up the draw schedule with your builder and title/inspection team.

9) Manage construction and cash flow

• Interest-only during construction. Track draws tightly and don’t burn contingency early.
• Keep your HELOC open as a backstop if your lender allows subordinate lines for soft costs.

10) Convert to permanent financing

• Provide the final Certificate Of Occupancy, lien waivers, and any final inspections.
• The C2P converts automatically or with minimal paperwork, depending on program.

Common Mistakes I See (And How to Avoid Them)

• Buying land without a perc test on a septic site: I’ve seen costs jump $40k+ for engineered systems or a forced location change. Get the test early or make the contract contingent on it.
• Bridge term too short: Permits slip, weather happens. Borrow for 9–12 months with an option to extend; the fee is cheaper than a forced refinance or default.
• Assuming land value credit you won’t get: If you’ve owned the lot less than 6–12 months, many C2P lenders use the lower of cost vs appraised lot value. That can reduce your effective equity and force more cash at close.
• Title vesting mismatch: Buying under an LLC but planning an owner-occupied C2P. Fixing this later can create tax and transfer hassles. Check with your lender and attorney up front.
• Underestimating site costs: On sloped or rocky lots, double the excavation estimate until you have geotechnical and a firm earthwork bid.
• Ignoring prepayment penalties/minimum interest on the bridge: Paying off in month 3 and still owing 6 months of interest hurts. Negotiate it before you sign.
• Not aligning builder and lender: Some C2P lenders only work with licensed GCs with a track record. If you’re owner-builder, your pool of lenders narrows. Confirm your lender is fine with your builder.

Appraisal and Valuation: How Land Equity Is Counted

C2P lenders work off the “as-completed” appraisal. Here’s how the land factors in:

• If you owned the land less than 6–12 months, lenders often use the lower of:
• Your land purchase price (plus documented improvements), or
• The current appraised land value
• If you’ve owned the land longer than the seasoning period, or you’ve added substantial, documented improvements (grading, utilities, permits), many lenders will use the appraised land value.

What this means strategically:

• If the lot appraises higher but you bought it recently, don’t count on the premium unless the lender specifically allows it or you can document significant value-added improvements.
• Keep every invoice tied to the land (fees, engineering, utilities). Even if the lender doesn’t give you dollar-for-dollar credit, it strengthens your file.

Rate Locks, Extensions, and What to Budget for Time Slippage

Long locks can be pricey, but carrying a bridge longer because your C2P isn’t ready is costlier. To compare:

• Price a 6- or 9-month lock with float-down vs. carrying the bridge an extra 2–3 months.
• Ask your C2P lender about extension fees (e.g., 0.125–0.25 points for 30-day extension).
• On the bridge, negotiate an extension clause at a set fee. A 1% extension fee may be cheaper than scrambling for a new loan under pressure.

Special Situations

• Rural acreage with well/septic: Budget more time for perc and well siting. Bring in a local septic designer early; some sites need winter/summer testing windows.
• Coastal/flood zones: Elevation and foundation requirements can add six figures; flood insurance will affect your permanent loan DTI.
• HOA architectural control: Build this time into your plan. Some communities have a 2–3 meeting review cycle; missing a meeting adds a month.
• Owner-builder: Fewer lenders, lower max LTV (often capped around 65–75%), larger contingency, and stiffer documentation. Fine if you have experience, but be realistic.

Negotiation Moves to Secure the Lot Without Overpaying for Debt

• Lot hold agreement with developer: Builders sometimes have “lot holds” with refundable deposits while you finalize plans—cheaper than a bridge if available.
• Extended escrow with milestones: Offer a meaningful earnest deposit that goes nonrefundable after you pass soils, survey, and utility confirmations. Sellers like certainty.
• Seller carryback short-term: If a seller owns free and clear, they may act as your bridge lender for 6–12 months. Offer a market-rate interest-only note; it’s income for them and saves you points.
• Recorded option: If you truly need months before closing, an option with an option fee and clearly defined exercise conditions can lock the lot and keep your cash flexible.

What to Ask Lenders (So You Don’t Get Burned)

• For bridge providers:
• What’s the exact payoff amount if I close my C2P in month X?
• Any minimum interest, yield maintenance, or prepayment fees?
• Will you provide a payoff letter within 48 hours of request?
• Are there seasoning requirements to refinance or pay off?
• Can this be cross-collateralized with my current home to lower the rate?

• For C2P lenders:
• How do you treat land value if owned <6–12 months?
• Maximum LTV/LTC for my property type and builder profile?
• Rate lock options and costs; float-down policy?
• Can I keep a HELOC open during construction?
• How do you qualify me if I’m keeping my current home as a rental?

Real-World Budget Snapshot

Let’s say your total project looks like this:

• Land purchase: $200,000
• Soft costs (plans, permits, engineering): $45,000
• Site work: $95,000 (excavation, utilities, driveway, retaining)
• Build cost: $650,000
• Contingency: 10% of hard costs = ~$74,500
• Total project cost: ~$1,064,500

If your as-completed appraisal is $1,150,000 and your C2P lender offers the lesser of 85% LTC or 80% LTV:

• 85% LTC: 0.85 × $1,064,500 = $905,825
• 80% LTV: 0.80 × $1,150,000 = $920,000
• Your max loan is $905,825 (lower of the two), so you need ~$158,675 in cash/equity.
• If you bought the land via bridge for $200,000 recently, the lender may credit your land at $200,000 (lower of cost vs appraised). That alone could cover your required equity, but watch for the lender’s seasoning policy and how they treat contingency.

Insurance and Legal Bits You Should Plan For

• Before construction: Vacant land liability insurance is cheap and protects you if someone gets hurt on your lot.
• During construction: Builder’s risk (course of construction) is required. Your builder may provide it; sometimes the owner must. Clarify in your contract.
• After completion: Homeowner’s policy replaces builder’s risk upon conversion to permanent loan.
• Legal review: If you’re using an option, seller financing, or complex escrow terms, have a real estate attorney review it. Small legal fees upfront avoid very expensive surprises later.

Frequently Asked Questions

• Can land equity count as my down payment?
• Yes, generally. Lenders credit land equity toward required down payment. If you bought recently, many use the lower of cost vs appraised land value unless you’ve seasoned or improved the lot.

• How long do I need to own the land before it counts at appraised value?
• Common seasoning is 6–12 months. Some lenders waive it with documented, material improvements to the lot.

• Can I roll bridge loan fees into my C2P?
• Not directly. But the C2P payoff of the bridge ends ongoing interest. Plan for bridge closing costs in cash.

• What if my current home doesn’t sell on time?
• Use a HELOC or cross-collateralized bridge and confirm with your C2P lender whether they’ll qualify you carrying both homes. Otherwise, adjust the timeline so the C2P closes after your sale.

• Are owner-builders allowed?
• Yes, but fewer lenders participate, LTV caps are lower, and contingency requirements are higher. Provide a detailed construction resume, schedule, and subcontractor bids.

• Can I self-perform site work?
• Often yes, but lenders won’t credit your “sweat equity” as cash. And draws are against invoices; be ready to front cash and get reimbursed only for materials and third-party labor.

• How big should my contingency be?
• I advise 10–15% of hard costs for typical lots; 15–20% for complex sites (slopes, rock, long utility runs).

• Do I need a survey if pins are visible?
• If there’s any doubt about boundaries, encroachments, or easements, order a boundary or ALTA survey. It’s cheap insurance, especially for custom homes near setbacks.

A Short Checklist to Keep You On Track

• Financing
• Pre-approve with bridge source and C2P lender
• Confirm seasoning and land value credit rules
• Ask about prepay/minimum interest on the bridge
• Align vesting with the ultimate C2P

• Due diligence
• Order soils/perc, survey, title review
• Verify utilities and connection/impact fees
• Check zoning, setbacks, and HOA design rules
• Confirm access and road maintenance agreements

• Builder package
• Detailed budget and allowances
• Plans/specs aligned with site realities
• Builder credentials, insurance, references
• Construction timeline with realistic buffers

• Timeline management
• Bridge maturity beyond permit timeline
• C2P rate lock strategy with extension plan
• Clear draw schedule and inspection process
• Contingency funding source (HELOC or cash)

Final Thoughts

Bridge financing shouldn’t feel like gambling. When it’s anchored to a clear exit, backed by real due diligence, and structured with the right timelines, it’s simply a tool—one that can secure a rare lot and set you up for a smooth construction-to-permanent loan. Build your team early (lender, builder, designer, and, for rural/complex sites, a civil engineer), run the numbers conservatively, and negotiate time where you can. The clients who win in this process aren’t the ones who move the fastest; they’re the ones who move deliberately, with an eye on both the land and the loan that will carry them through to move-in day.