The quick read: A stabilized property can fail to refinance out of its bridge loan in 2026 on the same income it earned a year ago, because the permanent loan that has to take it out is sized to a debt coverage ratio at long-term rates, and those rates rose while a SOFR-based bridge coupon fell. The 10-year Treasury was 5.18% on September 24, 2026, up from 4.16% a year earlier, per the U.S. Treasury. In our illustrative $12 million apartment exit, that move alone means the property needs 11.3% more net operating income to clear a 1.25x floor. If it cannot, the choices are to pay down the gap, extend, refinance into another bridge or floating loan, or sell.
This page runs that exit test on the September 24, 2026 rate tape, with Freddie Mac's fixed-rate term sheet as the takeout. For the refinance-versus-sale framework itself, see our guide to bridge loan exit strategies. Every worked-example figure below is illustrative arithmetic, not a quote, a lender offer or a forecast.
Why did the bridge loan get cheaper while the refinance got harder?
Your bridge loan got cheaper to carry while the refinance got harder because the two loans price off different ends of the yield curve: a SOFR-indexed bridge coupon costs less than a year ago, while a fixed-rate takeout tracks Treasury yields that rose more than a full point. The Fed's September 16 hike left SOFR below its year-ago level.
The Federal Reserve raised the federal funds target range by a quarter point to 3.75%–4.00% on September 16, 2026, and SOFR stepped from 3.62% on September 16 to 3.85% on September 17, per the Federal Reserve Bank of St. Louis (FRED). At 3.87% on September 23, 2026, SOFR was still 25 basis points under the 4.12% it printed on September 23, 2025.
Long rates went the other way. The 10-year Treasury was 5.18% on September 24, 2026, against 4.16% on the same date in 2025, and the 5-year was 5.03% against 3.70%, per the U.S. Treasury's daily par yield curve. The 10-year was 4.44% on June 30, 2026 and 5.01% on September 16; it dipped to 4.94% the day after the Fed's hike, then climbed to 5.18% by September 24. Freddie Mac's fixed-rate term sheet describes the Treasury index as "the most volatile part of the coupon," and that is the part of a fixed-rate takeout that moved against you.
Rate tape, bridge index vs. takeout index (dated prints):
| Rate | Year-ago print | September 2026 print | Change | Source |
|---|---|---|---|---|
| SOFR | 4.12% (Sept. 23, 2025) | 3.87% (Sept. 23, 2026) | −25 bp | FRED |
| 30-day average SOFR | 4.3480% (Sept. 24, 2025) | 3.6976% (Sept. 24, 2026) | −65 bp | FRED |
| 5-year Treasury | 3.70% (Sept. 24, 2025) | 5.03% (Sept. 24, 2026) | +133 bp | U.S. Treasury |
| 10-year Treasury | 4.16% (Sept. 24, 2025) | 5.18% (Sept. 24, 2026) | +102 bp | U.S. Treasury |
What does a Freddie Mac takeout test before it pays off a bridge loan?
A Freddie Mac fixed-rate takeout checks three headline limits before it pays off an apartment bridge loan: a minimum 1.25x amortizing debt coverage ratio, a maximum loan-to-value of 75% or 80% depending on term, and a $10 million minimum loan amount, according to Freddie Mac's fixed-rate term sheet dated 4/26.
The same term sheet sets the rest of the box.
Minimum amortizing DCR: 1.25x for every term from 5 years to over 7 years.
Maximum LTV, amortizing or partial interest-only: 75% for a 5-year to under-7-year term; 80% for a 7-year term or longer.
Maximum LTV, full-term interest-only: 65% for a term up to 7 years; 70% for a term over 7 years.
Interest-only coverage: no help to the math, because "The DCR calculated for the partial-term interest-only and full-term interest-only period uses an amortizing payment."
Minimum loan amount: $10 million.
Maximum amortization: 30 years.
Refinance Test waiver: "No Refinance Test is necessary if the loan has an amortizing debt coverage ratio (DCR) of 1.40x or greater and a loan-to-value (LTV) ratio of 60% or less."
Application fee: the greater of $2,000 or 0.1% of the loan amount for conventional first mortgages.
The sheet's footnote says "Adjustments may be made depending on the property, product and/or market," so treat these as published limits, not a quote. An exit under $10 million needs a different program, which this page does not source; ask the takeout lender which one fits. For how these tests shape a bridge loan from day one, see our multifamily bridge loans guide and the agency loan overview.
How big is the exit gap on the September 24, 2026 rate tape?
On the September 24, 2026 rate tape, an illustrative apartment property with $1.1 million of stabilized net operating income falls $751,266 short of refinancing a $12 million bridge payoff at 1.25x, when the same income would have cleared it a year earlier with $525,335 to spare. Nothing about the building changed; the rate did.
Assumptions, so you can rerun them on your own numbers:
Bridge payoff: $12 million (hypothetical, set above Freddie Mac's $10 million minimum).
Takeout structure: 1.25x minimum amortizing DCR, 80% maximum LTV for a 7-year term or longer, and 30-year amortization, per Freddie Mac's fixed-rate term sheet.
Takeout rate: the 10-year Treasury plus a spread, S. We set S at a HYPOTHETICAL 1.62 percentage points and hold it constant across both dates. No page cited here states a 2026 takeout spread, so S is an input, not a market figure: replace it with the spread your takeout lender quotes and rerun the formula below.
Stabilized NOI: $1.1 million (hypothetical).
Formula: maximum loan = (NOI ÷ 1.25) ÷ annual loan constant, where the constant is 12 times the monthly payment per dollar borrowed on a 30-year amortizing loan: 0.070258 at 5.78% and 0.078231 at 6.80%, rounded to six decimals (the dollar figures use the unrounded constants).
Illustrative bridge exit test, $12 million payoff, Sept. 24, 2025 vs. Sept. 24, 2026:
| Exit test (illustrative) | Sept. 24, 2025 | Sept. 24, 2026 |
|---|---|---|
| 10-year Treasury | 4.16% | 5.18% |
| Takeout rate (10-year + hypothetical 1.62% spread) | 5.78% | 6.80% |
| NOI needed to refinance $12 million at 1.25x | $1.054 million | $1.173 million |
| Maximum loan on $1.1 million of NOI at 1.25x | $12.525 million | $11.249 million |
| Result against the $12 million payoff | $525,335 to spare | $751,266 short |
The NOI needed to clear the same $12 million exit rose by $119,601, or 11.3%, purely because the 10-year rose 102 basis points.
The loan-to-value test runs alongside. At Freddie Mac's 80% ceiling, a full $12 million takeout needs an appraised value of at least $15 million, and the September 2026 maximum of $11.249 million needs at least $14.061 million. This page has no sourced valuation for the example, so run both tests on your own appraisal; the smaller loan amount is the one you get.
The refinance-test waiver sits further out of reach: for $12 million at the illustrative 6.80%, a 1.40x amortizing DCR needs about $1.314 million of NOI, plus a loan at or under 60% loan-to-value.
Would a shorter fixed-rate takeout close the gap?
A shorter fixed-rate takeout does not escape the rate move on the September 2026 tape: the 5-year Treasury rose 133 basis points in a year, more than the 10-year's 102, and Freddie Mac's term sheet caps a 5-year to under-7-year loan at 75% loan-to-value instead of 80%.
On September 24, 2026 the 5-year was 5.03% and the 10-year 5.18%, a gap of 15 basis points, against 46 basis points a year earlier (3.70% and 4.16%), per the U.S. Treasury. A shorter term buys less rate relief than it did a year ago and gives up five points of leverage at the LTV ceiling. What it does buy is an earlier date to refinance again; whether that is worth it depends on your business plan.
How much does the takeout broker fee add to the cash you need?
A takeout broker fee adds directly to the cash you bring when the new loan is already capped by the coverage test, because every dollar of proceeds is spoken for by the bridge payoff: in the illustrative exit, a 2.50% fee instead of 1.00% adds $168,731 to the sponsor's cash.
Illustrative cash to exit, $12 million bridge payoff on the September 24, 2026 tape (other closing costs excluded):
| Cost line (illustrative) | 1.00% takeout broker fee | 2.50% takeout broker fee |
|---|---|---|
| Shortfall against the payoff | $751,266 | $751,266 |
| Broker fee on the $11.249 million capped loan | $112,487 | $281,218 |
| Shortfall plus broker fee | $863,753 | $1.032 million |
| Freddie Mac application fee (greater of $2,000 or 0.1%) | $11,249 | $11,249 |
Fee formula: fee = fee rate × loan amount, so 1.00% × $11.249 million ≈ $112,487 and 2.50% × $11.249 million ≈ $281,218, computed on the unrounded loan; a hand calculation on $11.249 million lands a few dollars higher.
Difference from fee choice alone: $281,218 − $112,487 = $168,731, whatever the rate tape does.
The 2.50% column is an illustrative input, not a sourced market norm. The fee cannot be financed on top of this loan, because the loan already sits at the 1.25x limit; any fee added to principal pushes coverage below the floor. For comparison, YieldStack, the publisher of this page, states its terms this way: 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.
What are your options if the property cannot refinance out today?
If the property cannot refinance out today, you have four options, and each one trades cash, time or control differently: pay down the gap and take the takeout, extend the bridge, refinance into another bridge or floating loan, or sell. Only a sale removes the coverage test; the rest change who pays for the gap, and when.
Options when the takeout falls short (mechanics from the cited pages; the last column is what to ask the lender):
| Option | What it does to the gap | Sourced mechanic | Ask before you choose |
|---|---|---|---|
| Pay down (cash-in refinance) | Closes it now with equity: $751,266 plus costs in the example | Freddie Mac fixed-rate: 1.25x, 75–80% LTV, $10 million minimum, Index Lock available | Can I lock the index before the payoff date, and for how long? |
| Extend the bridge | Buys time for NOI to grow; the gap itself is unchanged | CRE Daily, citing Multifamily Dive: debt-fund extension fees "now as much as 10% of loan balance, up from 1-3% in previous years" | What fee, paydown, coverage test or rate-cap renewal does my extension require? |
| Refinance into another bridge | Resets the clock at a new bridge rate | NerdWallet: bridge rates "can range from 6% to 14% or more"; LTVs or LTCs "from 65% to 80%" | What exit does the new lender underwrite, and at what assumed rate? |
| Agency floating-rate loan | Swaps the bridge for a 5-, 7- or 10-year floater priced off 30-day Average SOFR | Freddie Mac floating-rate sheet: $10 million minimum; borrower may buy its own cap | At what interest rate is the floater's coverage ratio tested? |
| Sell | Removes the refinance test; proceeds depend on price | No sourced 2026 cap-rate data on this page | What sale price clears the payoff plus selling costs? |
Pay down. The cash-in route is the cleanest if you have the equity. Freddie Mac's term sheet says its Index Lock lets borrowers "lock in the most volatile part of the coupon-- the Treasury index," which matters when the 10-year rose 24 basis points between September 17 and September 24, 2026.
Extend. CRE Daily's August 24, 2026 report, citing Multifamily Dive, says debt funds "command higher fees for extensions"; its "as much as 10%" is a ceiling, not a norm. For the 2026 cost mechanics, see how much it costs to extend a bridge loan in 2026.
Another bridge or a floater. A second bridge resets the clock but not the exit test. Freddie Mac's floating-rate loan prices off 30-day Average SOFR, which was 3.6976% on September 24, 2026, per FRED, and its sheet says "Borrower may obtain its own cap coverage from a third-party provider." Compare any new bridge against our guides to what good bridge loan terms look like and what a short-term bridge loan costs.
Is this a market-wide bridge problem or just your deal?
Distress in CRE CLOs is concentrated rather than market-wide, according to data vendor CRED iQ: its CRE CLO distress rate jumped from 19% in July to 28% in August 2026, and it calls the double-digit distress in CRE CLOs and single-asset, single-borrower CMBS "a divergence specific to 2021 and 2022 vintage collateral, not the broader lending market."
The same Commercial Observer article, published September 8, 2026, says Texas, Florida and Georgia carry 44 percent of the distressed balance, describing them as "bridge loans underwritten on rent growth that never showed up before their floating-rate plans ran out of runway." It adds that distress rates for conduit, Freddie Mac and single-family rental loans "have barely moved in eight months, each still under 5 percent." A CRED iQ product manager wrote the piece, so treat it as the vendor's reading of its own data.
One timing caveat: the 10-year moved from 4.44% on June 30 to 5.18% on September 24, 2026, and this page cites no lending survey that covers the period since, so it makes no claim about lending volume after that move. What you can measure is your own deal.
How do you get lenders competing for your bridge takeout?
You get lenders competing for a bridge takeout by sending one complete stabilized package, with the rent roll, trailing 12-month statement and the exit math already run, to several permanent and bridge lender types at once, so the coverage and leverage tests are priced side by side. 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.
Get competing takeout terms on your bridge exit
The bottom line
On the September 24, 2026 tape, the same apartment income supports less permanent debt than it did a year ago, because a fixed-rate takeout's coupon is built on a Treasury index, and the 10-year rose 102 basis points while SOFR fell. Run Freddie Mac's test on your own NOI now: 1.25x, 75–80% LTV and a $10 million floor. Then price the gap four ways (pay down, extend, refinance again, or sell), and keep the takeout broker fee in the math, because on a loan capped by coverage, the fee is cash.