Last updated: December 2025
Quick answer
For experienced development entities working on 10–30 unit multifamily projects, choosing the right loan structure is just as important as choosing the right property.
Whether you’re acquiring a distressed asset, repositioning an underperforming building, or planning phased renovations, the financing you choose will shape your timeline, leverage, and return profile.
This guide breaks down the differences between bridge, renovation, and value-add loans and shows how Marquee tailors loans of $750K–$5M+ for business entities with 3+ completed projects.
Smaller multifamily properties, typically 2 to 30 units, offer unique opportunities for developers. They’re easier to manage than large buildings, offer diverse exit options, and present excellent value-add potential.
Matching the right lender
Tightened bank underwriting standards and longer approval timelines reflected in the Federal Reserve’s senior loan officer lending standards survey, help explain why private bridge and value-add loans have become essential for smaller multifamily deals.
But financing these properties can be tricky, especially when you’re acquiring, renovating, or repositioning the asset.
That’s why it’s critical to understand the differences between bridge loans, renovation loans, and value-add loans, and how each fits different phases of a multifamily investment strategy.
Let’s break them down, compare their strengths, and help you determine which is the best fit for your next deal.
Let’s Get Your Loan Started
Understanding small multifamily financing needs
Smaller multifamily projects often fall into a gray area: too complex for traditional residential lending, but too small for institutional multifamily financing.
Private lenders, like Marquee Funding Group, fill this gap by offering flexible, fast loans customized for investors working with:
- Duplexes and fourplexes
- 5–30 unit apartment buildings
- Mixed-use buildings with residential components
- Properties needing cosmetic or structural renovation
- Non-stabilized or underperforming assets
Choosing the right loan product depends on your property condition, timeline, investment strategy, and exit plan.
What is a bridge loan?
A bridge loan is short-term financing used to acquire a property quickly, typically when:
- Permanent financing isn’t yet available
- The property needs seasoning or stabilization
- The investor needs to close fast
- Light improvements or upgrades are planned
As commercial real estate credit standards tighten, reflected in Federal Reserve data tracking lending conditions, short-term private bridge loans often become the primary entry point for financing transitional assets.
Key features:
- Loan terms: 6–18 months
- Interest-only payments
- Fast closing (5–10 days)
- Flexible underwriting (credit, income, property condition)
- No stabilization required
Bridge loans are ideal for investors who want to buy now and refinance later after increasing value or improving performance.
What is a renovation loan?
Renovation (or “reno”) loans are designed to fund the purchase and rehab of a property. They’re used when a property requires more than just cosmetic work and may be uninhabitable or non-cash-flowing at the time of purchase.
Best for:
- Vacant or distressed multifamily buildings
- Heavy CapEx projects (roof, systems, layout changes)
- Value-add with significant renovation scope
- Unit-by-unit rehab for rent increases
Typical structure:
| Feature | Common Terms |
| Term | 12–24 months |
| Interest rate | 9%–12%, interest-only |
| Points | 1.5–3 upfront |
| Loan-to-cost | Up to 85% |
| ARV-based LTV | Up to 70% of the after-repair value |
| Draws | Based on construction progress |
| Interest reserve | Often included |
Marquee Funding Group offers fast approvals for reno loans with detailed scopes of work and clear exit strategies.
What is a value-add loan?
Value-add loans combine aspects of bridge and renovation loans, providing flexible financing for projects where the investor plans to improve NOI, raise rents, and reposition the property, even if the rehab isn’t extensive.
These loans are often used when:
- The property is cash-flowing but underperforming
- Units need interior upgrades
- Operating expenses can be optimized
- Management or marketing changes are planned
Why choose value-add financing?
- Renovation costs may be moderate
- Property may remain partially leased during the project
- Rent increases drive long-term value
- Great option for BRRRR (Buy, Rehab, Rent, Refinance, Repeat) strategies
Bridge vs. reno vs. value-Add Loan: Which structure matches your strategy?
| Feature | Bridge loan | Reno loan | Value-add loan |
| Purpose | Acquisition | Purchase + rehab | Repositioning + NOI gain |
| Rehab requirement | Light to none | Moderate to heavy | Light to moderate |
| Property condition | Varies | Often distressed | Operational but underperforming |
| Draw schedule | Not typical | Yes | Sometimes |
| Time to fund | 5–10 days | 7–14 days | 7–10 days |
| ARV-based lending | Sometimes | Yes | Yes |
| Occupancy required | No | No | Often partially leased |
| Ideal exit strategy | Refinance or sale | Stabilize and refi/sell | Long-term hold or refinance |
How Marquee tailors loans for small multifamily projects
At Marquee Funding Group, we understand that every deal is different. That’s why we offer custom loan structures for:
- Investors purchasing 2–30 unit multifamily properties
- Out-of-state or foreign national investors
- Non-traditional borrowers (self-employed, LLCs, trusts)
- Unique deal structures (partner buyouts, estate situations, bridge-to-perm)
Our team evaluates deals based on common-sense underwriting, asset strength, and borrower experience; not just credit scores or tax returns.
When to choose each loan type
Choose a bridge loan if:
- You’re buying a property at auction or need to close quickly
- You plan to refinance after minor updates
- You want to secure an opportunity while arranging long-term financing
Choose a renovation loan if:
- The building needs structural work or is not currently habitable
- You want to reposition the asset significantly before lease-up
- You need funds for contractors, permits, and construction
Choose a value-add loan if:
- You’re upgrading units and increasing rents
- The building is partially stabilized but underperforming
- You’re executing a BRRRR strategy or plan to refinance post-renovation
Choose the right strategy for your multifamily investment
Small multifamily investments require the right strategy and the right financing to unlock maximum value.
Whether you need a bridge loan for fast acquisition, a renovation loan for major upgrades, or a value-add loan for repositioning, Marquee Funding Group offers fast, flexible, and expert-backed solutions for experienced developers.
Our team can guide you through your options and customize a loan that fits your timeline, goals, and deal structure. Get started with Marquee Funding Group today.
Frequently asked questions: Bridge vs Reno vs Value-Add Loan
Q: Can I use a bridge or value-add loan for a duplex or 4-plex?
A: Yes. Marquee offers private loans for 2–4-unit properties, especially if they’re non-owner-occupied or held for investment.
Q: What documents do I need to get approved quickly?
A: Provide the purchase contract, renovation scope (if applicable), rent roll, budget, exit strategy, and any comps or pro forma financials.
Q: How fast can Marquee fund my multifamily project?
A: Most loans can be funded in 5–10 business days with complete documentation and a clear project plan.
Q: Can I refinance with a traditional lender after completing the project?
A: Yes. Many investors use Marquee’s short-term financing to complete renovations and then refinance into a long-term conventional or agency loan.
Q: Are interest reserves included in these loans?
A: Yes. Marquee can structure interest reserves into the loan so that monthly payments are covered during the renovation or lease-up phase.