The quick read: A $3 million to $10 million Denver apartment bridge loan can come from banks and credit unions, non-bank bridge lenders and debt funds, or private and hard-money lenders. Freddie Mac's short-term Value-Add loan is the agency option, but its term sheet excludes Conventional Small borrowers, so confirm eligibility first. In a market HUD rated slightly soft in the second quarter of 2026, with apartment vacancy at 10.6 percent, the offers separate on four sizing questions: whether the lender sizes on asking rent or on rent after free months, how it treats concession burn-off, which DSCR and debt-yield floors it applies, and whether the payoff clears a Fannie Mae or Freddie Mac refinance.
The question that moves a Denver bridge quote is which rent the loan is sized on: a lease signed at the asking rent with one month free collects one-twelfth less than the rent roll shows.
Who makes $3M–$10M apartment bridge loans in Denver?
A $3 million to $10 million apartment bridge loan in metro Denver can come from three lender types: banks and credit unions lending from their own balance sheets, non-bank bridge lenders and debt funds lending investor capital, and private or hard-money lenders. Freddie Mac's Value-Add loan is a fourth, agency option, with an eligibility catch.
For banks, the Federal Reserve's July 2026 Senior Loan Officer Opinion Survey shows where appetite stood in the second quarter. A modest net share of banks reported easing standards for multifamily loans, but the easing was uneven: large banks, those with $100 billion or more in domestic assets, reported easier standards for all commercial real estate loan types, while other banks reported basically unchanged standards for multifamily loans. Moderate net shares of banks still described their multifamily standards as relatively tight.
Non-bank bridge lenders and debt funds each set their own sizing rules, which is why the questions later in this guide matter most with them. Private and hard-money lenders are covered in our guide to comparing hard-money lenders in Denver, and the mechanics of the loan itself are in our guide to multifamily bridge loans.
Freddie Mac's Value-Add term sheet describes short-term financing for properties with planned upgrades of $10,000 to $25,000 per unit: a three-year term with one 12-month extension at the borrower's request and one optional 12-month extension at Freddie Mac's discretion, a floating rate with interest-only payments and no rate cap required, and non-recourse terms. The same sheet says Conventional Small borrowers are not eligible, and Freddie Mac's Conventional Small term sheet covers loans of generally $2 million to $10 million. Ask an Optigo lender whether a Value-Add loan is available at your loan size before you plan around one.
How much new supply and vacancy are Denver bridge lenders underwriting?
Denver bridge lenders are underwriting a slightly soft apartment market: HUD's Region 8 report for the second quarter of 2026 puts metro Denver's apartment vacancy at 10.6 percent, down from 11.6 percent a year earlier but above the 8.2 percent national rate, with average monthly rent down 2 percent to $1,823.
Apartment vacancy, metro Denver: 10.6% in the second quarter of 2026, versus 11.6% a year earlier, per HUD.
Average monthly rent: $1,823, down 2% from $1,866 a year earlier, the steepest decline among the nine metros HUD highlights in the region.
Apartment units under construction: about 13,000, down 8% from a year earlier, per HUD.
Multifamily units permitted: 2,525 in the second quarter of 2026, down 9% from a year earlier, on HUD's preliminary data.
Units permitted in buildings of five or more units: 16,028 in 2021 and 8,195 in 2025, per the Census Bureau's annual metro permit files.
The 2021 count is nearly double the 2025 count. Across the Rocky Mountain region, HUD attributes the lower vacancy rate entirely to a sharp reduction in apartment completions, and its report counts a loss of 1,500 jobs, or 0.1 percent, in the Denver metro over the past year. A business plan that needs rent growth to reach its exit should bring evidence beyond the metro trend, because HUD's figures still show Denver rents falling. For local financing context, see our Denver market page and the statewide Colorado market page.
This guide does not quote a metro-wide Denver concession rate. What the agency guides make a lender underwrite is your building's own concession history, and Freddie Mac's Seller/Servicer Guide ties it directly to new supply: at full underwriting, the lender's property inspection must include an interview with the property manager about concessions, current competition and any new supply that will compete with the property (Section 8.15(b)).
How do bridge lenders size in-place rent against projected rent?
One published example of in-place versus projected sizing is Freddie Mac's Value-Add term sheet, which bases the loan on an as-is and an as-stabilized NOI pro forma: a baseline of 85 percent loan-to-value and a 1.15x minimum DCR as-is, and 75 percent and 1.30x as-stabilized, both subject to market adjustment.
The same sheet requires the appraisal to include both values. Ask any other bridge lender which income it sizes on at closing and which it uses to release renovation funds, because those two answers decide how much equity you bring on day one.
In a concession market, the as-is number is the one that moves. One month free on a 12-month lease cuts the effective rent on that lease by one-twelfth, about 8.3 percent. At HUD's second-quarter 2026 Denver average rent of $1,823, that is roughly $152 a month over the lease term. A rent roll that shows asking rents without the concession schedule overstates in-place income by one-twelfth on every unit carrying a one-month concession. Fix it with a unit-by-unit burn-off schedule: every concession, its value and the date the lease carrying it expires.
Coverage math shows why it matters. A lender that requires 1.25x, the minimum amortizing DCR on Freddie Mac's Conventional Small term sheet, can size to only 80 cents of annual debt service for every dollar of net operating income, so every dollar of concessions still in the trailing collections removes 80 cents of debt service the loan can carry. Our debt yield glossary entry covers the other test, net operating income divided by the loan amount; none of the agency term sheets or guide sections cited here sets a debt-yield minimum, so any floor in a bridge quote is the lender's own.
Which sizing tests decide a Denver bridge loan, and what should you prepare?
Seven tests decide how much a Denver apartment bridge lender will advance and whether the payoff can refinance: in-place versus projected rent, concession burn-off, DSCR, debt yield, occupancy at exit, the exit loan's size limits and new supply. The table shows how each is applied, citing the agency documents where one exists, and what to prepare.
Table: Denver apartment bridge loan sizing tests
| Test | How lenders apply it | What to prepare |
|---|---|---|
| In-place vs. projected rent | Freddie Mac's Value-Add sizes on as-is NOI (85% LTV, 1.15x DCR) and as-stabilized NOI (75%, 1.30x), subject to market adjustment | Rent roll with in-place and asking rent by unit, plus renovated comps |
| Concession burn-off | Fannie Mae deducts concessions; vacancy, concessions and bad debt must total at least the trailing three-month collections gap or 5% of gross potential rent | Concession schedule by unit: amount, lease start, lease end |
| DSCR | Fannie Mae uses a level amortizing payment, even on interest-only loans; Freddie Mac's Conventional Small requires 1.25x | T-12 and trailing three-month statements that tie to the rent roll |
| Debt yield | NOI divided by the loan amount; no agency document cited here sets a minimum, so the floor is the bridge lender's own | NOI-to-loan ratio on in-place and stabilized income |
| Occupancy at exit | Fannie Mae Small Mortgage Loans: 90% physical occupancy for the 90 days before commitment (10 or more units); Freddie Mac: 90% for the three months before closing | Monthly occupancy history and a lease-up schedule |
| Exit loan size | Fannie Mae Small Mortgage Loan: $9 million or less; Freddie Mac Conventional Small: generally $2 million to $10 million, 5 to 50 units | Takeout sized on stabilized NOI under agency DCR and LTV limits |
| New supply | Freddie Mac's inspection interview covers concessions, competition and new supply | Nearby lease-ups and the concessions they offer |
Read the table from the bottom up: the exit rows cap what the bridge can safely advance, because the takeout has to repay it.
How does concession burn-off decide the agency refinance?
Concession burn-off decides the agency refinance because Fannie Mae and Freddie Mac underwrite what tenants actually pay: Fannie Mae's guide deducts concessions from gross potential rent and floors the combined vacancy, concession and bad-debt deduction at the gap between trailing three-month collections and gross potential rent, or 5 percent, whichever is greater.
That rule sits in Section 203.01 of Fannie Mae's Multifamily Selling and Servicing Guide, which also says net rental income must reflect projected operations. If trailing three-month net rental income has fallen more than 2 percent against the trailing six or 12 months, the lender must cut it to 2 percent below the lowest trailing one-, three-, six- or 12-month figure, so a concession campaign launched just before a refinance lands in exactly that window. The section lets net rental income run above the trailing three months only when rents and collections are stable or increasing, and never above the highest single month, so burned-off concessions count once they show up in collections. Section 203.02 then tests coverage on a level amortizing payment, even for an interest-only loan, at the greater of the note rate or Fannie Mae's underwriting rate floor.
A payoff of $9 million or less is a Small Mortgage Loan under Part III, Chapter 9 of the same guide, which adds its own tests. Gross rental income is the lesser of actual in-place rents or market rents for occupied units, concessions come off gross potential rent, and the vacancy, concession and bad-debt deduction must be at least 5 percent of gross potential rent in Denver; only the New York and San Francisco metros can use 3 percent. A property with 10 or more units needs at least 90 percent physical occupancy for the 90 days before the commitment date.
Fannie Mae Small Mortgage Loan ceiling: $9 million original loan amount.
Freddie Mac Conventional Small: generally $2 million to $10 million on predominantly market-rate properties of 5 to 50 units, with a 1.25x minimum amortizing DCR and maximum LTV of 75% to 80% on amortizing loans, depending on term.
On the Freddie Mac side, the Seller/Servicer Guide requires at least 90 percent of units to have been occupied for the three consecutive months before loan closing, at rent levels that support Freddie Mac's underwriting value (Section 8.4). It lists rental concessions and rent levels, tenant demand and housing supply, and the debt coverage ratio among the foremost underwriting factors (Section 10.4), and it counts low vacancy and minimal rental concessions among the traits of an investment-quality mortgage (Section 10.7).
Put together, the exit needs clean months, not just full units. A free month burns off only when the tenant renews at full rent or the unit re-leases without a concession, and the agency lender then looks for the result in three months of collections. Build the bridge term backward: renovation, lease-up, burn-off, the three-month window and agency processing all have to fit before maturity, with extensions as the buffer. If the bridge is Freddie Mac's own Value-Add loan, its term sheet waives the 1 percent exit fee on a refinance into a qualified Freddie Mac conventional loan but says Freddie Mac will re-underwrite the loan at that point. Our explainer on how a bridge-to-agency loan works covers the rest of the handoff.
What should you ask a Denver bridge lender before you sign a term sheet?
Before you sign a Denver bridge term sheet, ask each lender to put its sizing rules in writing, because two quotes at the same rate can advance different amounts if one sizes on asking rent and the other on rent after concessions. These seven questions cover the tests above.
- Rent basis: Do you size on asking rent or on rent after concessions, and over which trailing period?
- Debt yield: Do you apply a minimum debt yield, and is it measured on in-place or stabilized NOI?
- Coverage tests: Which DSCR applies at closing, at each extension and at maturity?
- Interest reserve: How is the reserve sized, and what happens if concessions last longer than the pro forma assumes?
- Exit: Which takeout do you underwrite, and does my payoff fit that program's size limits?
- Extensions: What occupancy, coverage or fee conditions attach to each extension?
- Index and cap: If the rate floats, which index does it use, and is a rate cap required?
The index question is live. The Secured Overnight Financing Rate (SOFR) was 3.87 percent as of September 23, 2026, per FRED, a week after the Federal Reserve raised the federal funds target range by a quarter point to 3-3/4 to 4 percent on September 16, 2026.
How do you get lenders competing for a Denver apartment bridge loan?
You get lenders competing for a Denver apartment bridge loan by sending one complete package, with the rent roll, concession schedule, trailing statements, renovation budget and exit sizing, to several lender types at once, so each prices the same file against the others. YieldStack is a commercial mortgage brokerage, not a lender.
Submit time: 5-minute submit.
Time to first offer: median offer in under an hour, from an institutional lender.
Upfront cost: Zero upfront.
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. 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. Your purchase or payoff deadline sets the timeline, so state it on the first page of the package.
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The bottom line
In metro Denver, a $3 million to $10 million apartment bridge loan can come from a bank or credit union, a non-bank bridge lender or a private lender; check Freddie Mac's Value-Add eligibility before counting on it. The agency exit is sized on collections after concessions, so size the bridge the same way: document every concession and its burn-off date, and confirm the payoff fits Fannie Mae's $9 million Small Mortgage Loan ceiling or Freddie Mac's Conventional Small range before you sign.