No monthly payments on a bridge loan is the feature that gets a borrower’s attention, and it is accurate. Under our BBYS Buy Before You Sell No-Payment Bridge Loan, a borrower can carry a bridge loan for up to 12 months on a primary and up to 6 months on a second home or investment property, without making a monthly payment. What that phrase does not describe is the closing statement, and the gap between those two things is where brokers get caught.
The borrowers who need this product are not niche cases. NAR’s 2025 Profile of Home Buyers and Sellers found that repeat buyers made up 79% of the market, that 54% of them used proceeds from a previous home sale toward the new purchase, and that the typical homeowner had stayed in place 11 years before selling. That is a large population of equity-rich buyers whose purchase funds are locked inside a house they still live in.
Our BBYS Buy Before You Sell No-Payment Bridge Loan exists for exactly that borrower, and it works well when the closing costs are explained on the first call rather than the third. If you have a buyer trying to make a non-contingent offer, submit the scenario and we will walk through the cash-to-close picture with you before the borrower commits to anything.
What “No Monthly Payments” Means
Mechanically, we pay off the existing lien on the departure residence and provide cash-out that is used exclusively to finance up to 75% of the purchase of the new property.
Payments are deferred rather than waived. Interest accrues and the loan is repaid through a balloon payment at the end of the term: 12 months for owner-occupied departure properties and 6 months for non-owner-occupied. Eligibility allows for up to 75% LTV across owner-occupied, second home, and investment property scenarios.
The benefit that matters most for qualification is the debt-to-income treatment. Because there are no monthly bridge payments, the bridge debt does not weigh on the borrower’s DTI when we underwrite the new purchase. That is what allows a buyer to make a non-contingent offer without their ratios collapsing under two mortgages.
Standalone Bridge: When There’s No Permanent Loan to Pair It With
Everything above describes BBYS Buy Before You Sell No-Payment Bridge Loan paired with a new permanent purchase loan underwritten alongside it. We also offer a standalone version of the same no-payment bridge for buyers who don’t need us to finance the new purchase, such as cash buyers or buyers using a conforming loan elsewhere.
What Carries Over, What Changes
The core mechanics stay the same: we pay off the existing lien, no monthly payments accrue, and the loan is repaid through a balloon due in 12 months. Two things differ from the paired structure. Standalone Bridge tops out at 70% LTV, and it’s limited to owner-occupied departure properties.
An executed purchase contract on the new home is still required, and income on the departure property can be documented through Full Doc, 12- or 24-month bank statements, or asset depletion.
Choosing Between the Two
The decision comes down to what the buyer needs financed. If they need us to underwrite the new purchase too, the paired structure applies. If they’re bringing cash or another lender to the new purchase and just need the old property bridged, standalone is the fit.
The Line Items That Still Come Due
Deferring the monthly payment does not defer everything. Three categories show up at closing, and two of them surprise borrowers.
Fully Prepaid Hazard and Flood Insurance
Our underwriters require hazard and flood insurance to be fully prepaid at closing. There is no monthly escrow accumulating toward next year’s premium, because there is no monthly payment to escrow from. The full annual premium is a cash-to-close item.
In coastal and wind-exposed markets this is the single largest surprise on the statement. A borrower expecting to fold insurance into a payment they are not making needs to hear the annual figure early.
Impounded Property Taxes
Any property taxes coming due within the term must be fully impounded up front. Same logic: the collateral’s tax standing has to be protected across a period when no payments are arriving.
The size of this item depends entirely on where the closing falls relative to the tax calendar. A closing two months before a semi-annual installment looks very different from a closing two weeks after one. Pull the tax due dates before you quote cash to close, because this line item can swing by five figures on the same property.
Standard Closing Costs
Origination, title, appraisal, and recording behave the way they do on any file. Worth noting that we accept transferred appraisals in many cases, which can reduce third-party cost and time when the borrower already has a recent report.
Three Conditions That Change the Cost or Rule It Out
Florida caps LTV at 70%. Statewide, on this program. Florida brokers should build every BBYS Buy Before You Sell No-Payment Bridge Loan quote at 70% rather than 75%.
Rural properties are ineligible. Not reduced LTV, not additional conditions. Ineligible. If the departure residence is rural, this is not the product, and finding that out at intake saves everyone a week.
Credit events require 48 months of seasoning. Bankruptcy, foreclosure, short sale, and deed in lieu all require 48 months. That is a firm requirement on this program, and it is stricter than the seasoning some of our other products allow, so a borrower who does not clear it may still have a path on a different structure.
For self-employed borrowers, our 12-month and 24-month bank statement options pair with BBYS Buy Before You Sell No-Payment Bridge Loan, and those require two or more years of self-employment in the same business. Our bank statement program handles the income side while the bridge finances up to 75% of the new purchase.
The Obligations That Outlive Closing
Two program requirements continue through the term, and both belong in the first conversation because they carry real consequences.
The departure property must stay listed. It must remain actively listed on the MLS with an evidenced listing agreement.
The permanent loan is cross-collateralized to the bridge on paired transactions. When BBYS Buy Before You Sell No-Payment Bridge Loan is paired with a new purchase loan, the permanent financing is cross-collateralized with the bridge, which means failing to pay the balloon puts the new home at risk. This is also why the bridge and the permanent loan are processed concurrently, with the permanent loan underwritten to our super-prime guidelines. On Standalone Bridge, there’s no permanent loan in the transaction to cross-default against.
How to Frame This on the First Call, Then Bring Us the Scenario
The framing that works is straightforward: the borrower is trading monthly payments for a larger cash-to-close figure and a firm 12-month deadline. Both sides of that trade should be named.
A practical script: “You will not make a payment on this loan for up to 12 months. In exchange, we need a year of insurance prepaid and any taxes due in that window impounded. Your house needs to stay listed the whole time.”
Say all of that in the first ten minutes and the file holds together. Say it in week three and you are renegotiating with a borrower who feels misled by a feature that was described inaccurately.
The variables that drive the closing statement on a BBYS Buy Before You Sell No-Payment Bridge Loan file are the tax calendar, the insurance premium, and the LTV structure. Those inputs determine how large the prepaid items run. We can price it with you rather than after you.
If you have a buyer who needs to compete against cash offers without selling first, submit your scenario and your account executive will build the cash-to-close picture with the real numbers. Not yet an approved broker? Get started here.
Frequently Asked Questions
Do you really make no payments on a bridge loan?
Correct, on our BBYS Buy Before You Sell No-Payment Bridge Loan payments are deferred for up to 12 months rather than billed monthly. Interest accrues over the term and the loan is repaid through a balloon payment at the end: 12 months for owner-occupied departure properties and 6 months for non-owner-occupied. Deferring the payment is not the same as waiving the interest.
What does a borrower pay at closing on a no-payment bridge loan?
Three categories: fully prepaid hazard and flood insurance, impounded property taxes for anything due within the term, and standard closing costs such as origination, title, appraisal, and recording. The prepaid insurance and impounded taxes are the two items borrowers most often do not anticipate.
Does a bridge loan affect the borrowers DTI on the new purchase?
No. Because there are no monthly bridge payments, the bridge debt does not weigh on the borrower’s debt-to-income ratio when we underwrite the new purchase. That treatment is what makes a non-contingent offer possible for a borrower whose purchase funds are tied up in their current home.
