The quick read: Federal guidelines say a bank's internal loan-to-value limits should not exceed the supervisory limits: 85 percent for improved property, 80 percent for commercial, multifamily and other nonresidential construction, 75 percent for land development and 65 percent for raw land. On a purchase, value means the lesser of the price paid or the appraised value. Outside a short list of excluded transactions, anything higher is a documented exception capped against the bank's capital, so a bank's bridge quote can stop well short of 85 percent. If your bridge loan matures in the next 6 to 12 months, the same table sets the ceiling on any new bank loan that has to repay it.
Which supervisory LTV limit applies to a commercial bridge loan?
The limit follows what the bridge loan finances: a loan on a completed, income-producing building is an improved property loan capped at 85 percent, a bridge that funds rehabilitation of a commercial or multifamily building fits the construction category capped at 80 percent, and land loans stop at 75 percent for development and 65 percent for raw land.
The numbers come from the Interagency Guidelines for Real Estate Lending, which each federal banking agency carries in its own rules: the OCC at Appendix A to Subpart D of 12 CFR Part 34, the FDIC at Appendix A to Subpart A of 12 CFR Part 365 and the Federal Reserve at Appendix C to 12 CFR Part 208. All three print the same table and say institutions should set their own internal limits that do not exceed it.
The guidelines have no bridge category. The OCC's Comptroller's Handbook on commercial real estate lending (Version 2.0, March 2022) describes a bridge loan as short-term financing that lets newly constructed or acquired commercial properties reach stabilization, usually written for up to three years to allow the lease-up that precedes a sale or permanent financing. The definitions decide which category a bridge loan falls in:
- Improved property loan: secured by completed commercial property, residential property with five or more units, non-owner-occupied 1- to 4-family property, or other income-producing property that is completed and available for occupancy.
- Construction loan: credit for the purpose of erecting or rehabilitating buildings, including the infrastructure needed for development.
- Land development loan: credit to improve unimproved land before structures go up, such as sewers, water pipes, utility cables and streets.
When one loan funds several phases of a project, the guidelines apply the limit for the final phase the loan funds, and disbursements should not exceed actual development or construction outlays.
Table: Supervisory LTV limits and the bridge loans that fit them
| Attribute | Raw land | Land development | Construction (commercial, multifamily, other nonresidential) | Improved property |
|---|---|---|---|---|
| Attribute Supervisory LTV limit | Raw land 65% | Land development 75% | Construction (commercial, multifamily, other nonresidential) 80% | Improved property 85% |
| Attribute What the loan finances | Raw land Unimproved land | Land development Site work before structures go up | Construction (commercial, multifamily, other nonresidential) Erecting or rehabilitating buildings | Improved property A completed building available for occupancy |
| Attribute Bridge loan that fits (our mapping) | Raw land Holding a site, for example while it is entitled | Land development Horizontal work on a site or lots | Construction (commercial, multifamily, other nonresidential) Heavy renovation or ground-up work | Improved property Acquisition or lease-up of an existing building |
| Attribute Ceiling on a $10,000,000 value (our arithmetic) | Raw land $6,500,000 | Land development $7,500,000 | Construction (commercial, multifamily, other nonresidential) $8,000,000 | Improved property $8,500,000 |
Supervisory LTV limits (12 CFR Part 34, Subpart D, Appendix A): 85% improved property, 80% commercial and multifamily construction, 75% land development, 65% raw land
Ask the bank which category it will book your loan in before you size the deal, because a renovation budget can move a request from the 85 percent column to the 80 percent column.
Which value does a bank measure the bridge loan against?
On a purchase, the guidelines define value as the lesser of the actual acquisition cost or the appraised or evaluated value, so for the supervisory test a bank cannot count an appraisal that comes in above your contract price; on a refinance, value is the market value in the appraisal or evaluation itself.
The guidelines compute the ratio at origination by dividing the extension of credit by the total value of the property securing it, plus any readily marketable collateral and other acceptable collateral, and they include all senior liens on the property. Two consequences matter on a bridge loan:
- The whole commitment counts. An extension of credit means the total amount of any loan, line of credit or other legally binding lending commitment, so a renovation or interest holdback that funds over time is in the loan amount on day one.
- Extra collateral can widen the base. Readily marketable collateral, defined as insured deposits, financial instruments and bullion, and other acceptable collateral, such as an unconditional irrevocable standby letter of credit, can be added to the value side.
The property's stage guides which appraised value a bank uses. Appendix C of the OCC handbook says the value used for the supervisory LTV can be as-is, as-completed or as-stabilized: as-is for raw land or stabilized property, and as-stabilized for an existing property that is not yet stabilized. On a purchase, the lesser-of rule still caps the value at the price paid. For how cost can cap proceeds before value does, see LTV vs. LTC on a bridge loan.
Value on a purchase (Interagency Guidelines, all three agencies): lesser of actual acquisition cost or the estimate of value
Loan amount in the ratio (same guidelines): the full legally binding commitment, measured at origination
Can a bank lend above the supervisory LTV limit?
Yes, as a documented exception: the guidelines allow a bank to make a loan above the supervisory limit when other credit factors support it, but all such loans together should not exceed 100 percent of the bank's total capital, and the commercial, agricultural, multifamily and other non-1-to-4 family share should not exceed 30 percent.
Each loan above the limits should be identified in the bank's records, the aggregate reported to the board at least quarterly, and each approval backed by a written justification. A bank comes under increased supervisory scrutiny as its totals approach the caps, and the guidelines warn that an excessive volume of exceptions to a bank's real estate lending policy may signal weakening underwriting.
The OCC handbook adds two counting rules. The entire outstanding balance of a nonconforming loan counts toward the cap, not just the portion above the limit, and if the bank holds both a first and a second lien whose combined commitment exceeds the limit, both loans are reported. A loan leaves the totals once principal paydowns, added collateral or added equity bring it back within the limit.
Exception basket, all loans above the limits (12 CFR Part 365, Appendix A to Subpart A): 100% of total capital
Commercial, agricultural, multifamily and other non-1-to-4 family share (same appendix): 30% of total capital
Some transactions sit outside the limits altogether. The excluded list includes loans whose U.S. government guaranty covers the excess, loans sold promptly without recourse, and loans renewed, refinanced or restructured without new funds or an increase in the line of credit, other than reasonable closing costs.
For an investor whose bridge matures in the next 6 to 12 months, that list matters. A straight extension of an existing bank loan with no new money sits outside the LTV table, while a larger loan or a cash-out refinance is measured against it. The OCC handbook also says a loan that met the limits at origination is not an exception just because its collateral later declined in value.
Why can a bank's bridge quote come in below the supervisory limit?
A bank's bridge quote can land below the supervisory ceiling because the guidelines treat those percentages as the most a bank's own policy should allow, not as sound terms, and they tell banks to consider lower internal limits for riskier subcategories, weigh cash flow and equity alongside LTV and fit exceptions inside a capital cap.
Establishing the supervisory limits should not be read to mean that loans at those levels are automatically sound, and LTV is only one of several credit factors. The standards the guidelines list for development projects and completed commercial properties read like a bridge loan checklist: minimum hard equity from the borrower, standards and limits on non-amortizing loans, standards and limits on interest reserves, pre-leasing requirements for income-producing property, and minimum debt service coverage. An interest-only bridge on a building still in lease-up touches most of that list, and each item can cut proceeds below the table.
Capital is the second brake: every commercial loan above the limits uses room in a basket capped at 30 percent of total capital, shared with every other commercial borrower who might need an exception.
Market conditions are the third. The Federal Reserve's July 2026 Senior Loan Officer Opinion Survey (page dated August 3, 2026), answered by 56 domestic banks, asked where standards sit within the range they have occupied since 2005. For commercial real estate, a significant net share of banks put standards for construction and land development loans at the tighter end of that range, and moderate net shares reported relatively tight standards for nonfarm nonresidential and multifamily loans. Those net shares were lower than in July 2025. Over the second quarter of 2026, moderate and modest net shares of banks reported easing standards on nonfarm nonresidential and multifamily loans, respectively, while construction and land development standards remained basically unchanged on net.
Respondents (Fed SLOOS, July 2026): 56 domestic banks and 18 U.S. branches and agencies of foreign banks
The guidelines are addressed to insured depository institutions. A nonbank bridge lender sizes under its own credit policy and whatever rules govern that lender, so its proceeds on the same building can land above or below a bank's, and the only way to know is to see the terms side by side.
How does the supervisory limit size an illustrative bridge purchase and refinance?
On our illustrative $10,000,000 purchase of a half-leased building that appraises at $10,800,000, the supervisory ceiling is $8,500,000 because value is capped at the price, and a hypothetical 75 percent internal bank limit cuts the loan to $7,500,000, leaving the investor $2,500,000 plus closing costs to fund.
Illustrative example (our arithmetic, not a quote or a lender offer): the building is a completed, income-producing property, so it sits in the 85 percent improved property column. The 75 percent internal limit is a hypothetical bank policy, used only to show how a policy below the table changes the result. The third column is a new bank loan refinancing an existing bridge loan that matures in nine months.
Table: Three illustrative bank sizings under the supervisory limits
| Line | Purchase, appraisal above price | Purchase, appraisal below price | Refinance at maturity |
|---|---|---|---|
| Line Price paid or loan balance | Purchase, appraisal above price $10,000,000 price | Purchase, appraisal below price $10,000,000 price | Refinance at maturity $8,000,000 balance |
| Line Appraised value | Purchase, appraisal above price $10,800,000 | Purchase, appraisal below price $9,600,000 | Refinance at maturity $10,000,000 |
| Line Value the guidelines count | Purchase, appraisal above price $10,000,000 | Purchase, appraisal below price $9,600,000 | Refinance at maturity $10,000,000 |
| Line Supervisory ceiling at 85% | Purchase, appraisal above price $8,500,000 | Purchase, appraisal below price $8,160,000 | Refinance at maturity $8,500,000 |
| Line Hypothetical internal limit at 75% | Purchase, appraisal above price $7,500,000 | Purchase, appraisal below price $7,200,000 | Refinance at maturity $7,500,000 |
| Line Cash the investor brings, before costs | Purchase, appraisal above price $2,500,000 | Purchase, appraisal below price $2,800,000 | Refinance at maturity $500,000 paydown |
The $800,000 of appraisal above the price adds nothing to the first column, while the $400,000 shortfall in the second column cuts the ceiling by $340,000 and the hypothetical policy loan by $300,000. In the refinance column, the supervisory ceiling covers the balance and the bank's own policy does not.
Now add a $1,000,000 renovation commitment. The whole commitment counts at origination, and a loan that funds rehabilitation fits the 80 percent construction definition. If the bank measured the total commitment against the same $10,000,000 value, the ceiling would be $8,000,000 in all, or $7,000,000 toward the purchase once the $1,000,000 renovation sits inside it. A bank that measures against an as-completed or as-stabilized value sizes it differently, so ask which value the commitment is tested against. Run your numbers through the bridge loan calculator before asking for terms.
How do you get a commercial bridge loan placed when a bank's LTV falls short?
Our pick is a commercial mortgage brokerage that matches one bridge request against many lender programs, because the supervisory limits apply only to insured depository institutions and every program sizes the loan under its own credit policy and whatever rules govern that lender. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors.
YieldStack publishes this guide, so the pick is ours, made for an investor whose bank quote stops below what the deal needs or whose bridge loan matures within the year.
Option 1: a commercial mortgage brokerage (our pick). We rank it first for three reasons.
- Ceilings differ by lender. A bank sizes under the interagency table and its own policy limits, while a nonbank program sets its own within whatever rules govern that lender. YieldStack's software matches the deal against 20,000+ loan programs and compares the options; human brokers structure the request, negotiate for the borrower and carry the deal toward closing.
- A maturity date does not move. With a median first offer in under an hour, from an institutional lender, you see how lenders size the loan before an extension deadline forces the choice.
- The cost is set before you commit. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing.
Option 2: your relationship bank. A bank that already knows the sponsor is a strong fit when the request sits inside its internal limits, and an extension of its own loan without new money sits outside the LTV table.
Option 3: a nonbank bridge lender, direct. It sizes under its own policy and whatever rules govern it, not the interagency table, and going direct shows you one program's terms at a time.
What to send:
- Purchase contract or current loan documents, with the maturity date and any extension terms
- The most recent appraisal, with each value and its effective date
- Trailing 12-month operating statement and a current rent roll
- Renovation budget and schedule, if the loan funds work
See the structures on the commercial bridge loan page, and when the file is ready, send your bridge loan request for review. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed.
The bottom line
A bank's own LTV limits on a commercial bridge loan should not exceed 85 percent for improved property, 80 for commercial and multifamily construction, 75 for land development and 65 for raw land, measured on the full commitment and, on a purchase, the lesser of price or appraisal. Exceptions draw on a capped capital basket, so a bank's quote can stop lower. If your loan matures in the next 6 to 12 months, size a new bank loan against the table now and compare other programs before the date arrives.