Bridge Loans in NYC: Exits, Recording Tax and CEMA

Updated 2026-08-19 16 sources

General information about how this works in New York City — not financial, tax, or legal advice, and not an offer of credit. lender.nyc is not a lender or a mortgage broker and is not licensed by NY DFS.

What a bridge loan is, and when NYC forces one

A bridge loan is short-term, interest-only, collateral-first financing that spans a gap between two known states of a property. It is priced on speed and certainty, not on the borrower’s income, and it is repaid by an event — a sale, a refinance, or a completed lease-up — rather than by amortization.

New York City manufactures those gaps more reliably than almost any other market. A co-op board can take months to schedule an interview and is not obliged to explain a rejection, so a seller cannot promise a closing date. A partially vacant multifamily building will not clear a permanent lender’s DSCR test until it is leased, but nobody will lend permanently on the un-leased version. Estate and probate sales, foreclosure auctions and 1031 exchange deadlines all run on clocks measured in weeks. Unwarrantable condos and new-development sponsor units sit outside conventional guidelines entirely. And a maturing loan on a building the bank no longer wants is a refinance problem regardless of how well the asset performs.

Exit strategy is the underwriting

Everything else in a bridge file is arithmetic. The exit is the credit decision.

There are three exits, and they fail in different ways.

Sale. Credible when the asset is a product type with a deep, observable bid and no approval gate. It fails on co-ops, because the buyer’s board approval is a condition you do not control, and it fails on anything requiring a Department of Buildings sign-off you have not yet obtained — no certificate of occupancy, no closing.

Refinance into DSCR or bank debt. Credible when the post-stabilization rent roll clearly clears the take-out lender’s ratio at plausible terms, with the seasoning that lender requires. It fails when the sponsor’s exit DSCR assumption uses market rent on a rent-stabilized unit, when the appraisal comes in below the refinance basis, or when the take-out lender’s seasoning clock has not run. Roc Capital publishes a version of this test directly, listing property condition C2 or better, “or C4+ with 1.10 exit DSCR” on its stabilized bridge program (observed August 19, 2026) — the exit ratio is a stated program input, not an afterthought.

Lease-up. Credible when comparable units in the building are already renting at the assumed level. It fails when the pro forma rent has never been achieved anywhere in the building, and it fails slowly and expensively, because vacancy and carry compound against a short clock.

The practical rule: an exit is credible when it depends on things you control or can observe today, and fragile when it depends on a third party’s discretionary approval. Board approvals, DOB sign-offs and appraisals are all third-party discretion. Price the extension option accordingly.

Published terms, named and dated

All observed on the lenders’ own pages on August 19, 2026.

Three structural terms matter more than the rate and are published far less often.

Points and origination. Anchor Loans publishes “1 to 2 origination points,” Silver Arch publishes fees “From 1.5%,” and Ready Capital publishes “1.00% origination” on its multifamily bridge program. Kiavi, Lima One, RCN and Roc do not publish points at all. Lima One does publish an unusual structure worth knowing about: “Defer the payment of your origination fees to when you exit the property.”

Exit fees, extension fees and minimum interest. Ready Capital is the rare lender that publishes numbers — “0.25%+ exit” and “0.25%+ extension,” with prepayment described as “Minimum interest; no lockout period.” Kiavi states the opposite posture, advertising “no prepayment penalties or exit points.” Silver Arch references “extension options” without publishing the fee. On a twelve-month loan, a minimum-interest provision and a 0.25% extension fee can matter more than 50 basis points of rate.

Recourse. Roc Capital states “Full recourse only” and requires an entity. Ready Capital publishes “Non-recourse with standard carve-outs” at its $5MM-and-up institutional tier. Manhattan Bridge Capital, which lends across all five boroughs, states that its loans are “generally accompanied by personal guarantees from the principals of the businesses.” The pattern is consistent: below the institutional threshold, expect entity title and a full personal guaranty. The LLC is a title-holding and liability structure, not protection from the lender.

The recording tax angle, and why CEMA is a term-sheet issue

New York charges mortgage recording tax every time a mortgage is recorded. That means a bridge loan followed by a permanent refinance is a taxable event twice — once on the bridge, once on the whole take-out — unless you do something about it.

The NYC tiers, per the rate table published by title agencies and reproduced in the American Association of Private Lenders’ CEMA article: 2.05% on mortgages under $500,000; 2.175% on mortgages of $500,000 or more secured by a one-, two- or three-family residence or residential condominium unit; and 2.80% on mortgages of $500,000 or more on all other property types — which captures most 4+ unit multifamily and mixed-use. Note there is no $1,000,000 tier; the top bracket begins at $500,000. The NYC Department of Finance itself no longer publishes a rate table and directs filers to the ACRIS calculator.

Of that total, 0.25% is the special additional tax, which under Tax Law § 253 falls on the lender where the security is one or more structures containing not more than six residential dwelling units. So the borrower’s effective share is commonly quoted as 1.80% under $500,000 and 1.925% at or above it on a one-to-three-family. Two carve-outs are worth knowing: on a building larger than six families the borrower pays that 0.25%, and where the lender is a natural person rather than an entity the allocation changes — a live question in private lending, where the lender may be an individual. There is also a small credit: NYS Tax Bulletin TB-MR-5 excludes the first $10,000 of a mortgage on a one- or two-family dwelling from the additional tax, which nets out to roughly $30.

CEMA, and the dollars

A Consolidation, Extension and Modification Agreement is a New York instrument with no equivalent elsewhere. The outgoing lender assigns its existing note and mortgage to the incoming lender, and the two are consolidated into one obligation. Per the AAPL article, “Section 255 of the New York Tax Law allows a borrower to avoid paying mortgage tax on the unpaid principal balance of the existing loan and to pay tax on only the new indebtedness issued by the new lender.”

Work it through on a realistic outer-borough deal. Assume a Bedford-Stuyvesant two-family bought with an $1,200,000 bridge loan, refinanced eighteen months later into a $1,400,000 DSCR loan.

The CEMA saves roughly $23,100 — about 1.9% of the loan balance, and materially more on a commercial-tier asset at 2.80%. The AAPL article’s own example makes the point at scale: a $3,000,000 balance refinanced to $3,500,000 taxes only the $500,000 of new money, which it describes as “an $84,000 savings if the transaction is in New York City.” Against that sit the CEMA’s costs — an assignment fee to the outgoing lender commonly reported in the several-hundred to two-thousand-dollar range, plus additional attorney and title work. The math is not close.

The catch is consent. A CEMA requires the existing lender to assign, and it is under no obligation to do so. The AAPL piece describes the operational reason this drags even when a lender agrees: “the assigning lender must provide all original notes, allonges, mortgages, and mortgage assignments for each and every mortgage listed in the title commitment at closing,” and locating that original collateral “could take days or weeks.” A private lender that has securitized, sold participations in, or simply misplaced the original note is a lender that cannot deliver a CEMA on your timetable.

That makes CEMA cooperation a term-sheet negotiation, not a payoff-letter conversation. Ask before you sign: will you assign, what do you charge for it, how many business days do you need, and where is the original note held. Lenders that originate regularly in New York generally know the drill — the AAPL article argues the CEMA “is essential to all private lenders originating in New York” — but a national lender treating New York as one more state on a list may not, and you will find out at the worst possible moment.

Co-ops, condos and what bridge lenders will not touch

Co-ops are the persistent NYC blind spot. West Forest Capital states in an April 2026 post that “most co-ops are not eligible due to their ownership structure and board approval requirements,” citing share ownership and mandatory board interviews, while noting that “condos are generally financeable with hard money loans.” The structural reason is that a co-op interest is personal property — shares plus a proprietary lease — so a lender perfects by UCC-1 filing rather than a recorded mortgage, and most bridge programs are built entirely around a recordable first lien.

Property-type exclusions bite elsewhere too. Kiavi’s bridge page lists “mixed-use, commercial, mobile homes, and rural properties” as ineligible, which rules out a large share of the outer-borough inventory investors actually buy. Lima One’s short-term products cap at four units. Roc restricts condos to warrantable ones. RCN is the outlier among the national programs, publishing eligibility for “5+ Unit Apartments” and mixed-use at 70% or more residential. Balance-sheet lenders like Emerald Creek and Silver Arch start at $1-2 million and lend on commercial property types, which is a different market segment rather than a bigger version of the same one.

Verify state and borough coverage before spending money. Kiavi lists New York explicitly; Lima One and Roc exclude only a handful of states not including New York; RCN and Anchor Loans publish no affirmative New York statement, and a published state list is not the same as appetite for a five-borough asset.

This guide is educational and informational. It is not financial, tax or legal advice; CEMA structuring and recording tax treatment are transaction-specific and belong with a New York real estate attorney and your title company. Every rate, fee and program term above is attributed to a named source as of the date observed and can change without notice.