Bridge-to-Agency Takeout Calculator
Find out whether the permanent loan at stabilization pays off the bridge, and by how much it clears or misses.
The calculator sizes the permanent loan your stabilized building supports, the lower of the LTV and DSCR limits, and compares it with your bridge payoff including the exit fee. It returns the shortfall or surplus, the NOI needed to clear the payoff, and the highest rate at which the takeout still works.
What the calculator answers
This calculator answers the question every bridge borrower has to face before the bridge matures: when the building stabilizes, will a permanent loan pay the bridge off in full. It also tells you how far you are from that point, in dollars of loan, dollars of NOI and the interest rate at which the deal stops working. It is built for owners who bought or repositioned a 5+ unit building with bridge debt and plan to refinance into agency, bank or HUD financing.
Bridge-to-agency takeout test
Estimates only, not a loan quote.
How to use it
Seven inputs. The first two are about your bridge loan and your building, the last five are the permanent lender's terms.
Bridge payoff including exit fee
The full amount it will take to release the bridge lender's lien. Start with the outstanding balance, including any renovation draws you have taken, then add the exit fee from your loan agreement and any accrued interest or extension fees. Ask your servicer for a payoff statement if you are close. Leaving out the exit fee is the most common reason a takeout that looked fine misses at closing.
Stabilized NOI
The NOI a permanent lender will underwrite once the building is stabilized, not your pro forma. Permanent lenders generally size on income the building has actually collected, with their own vacancy, management and reserve assumptions. If renovated units are leased but not yet reflected in a full year of results, ask how the lender will treat recent leases. The T-12 underwriting calculator shows how a lender adjusts your statement.
Takeout rate and amortization
The rate and amortization schedule you expect on the permanent loan. Use a current quote or an index-plus-spread estimate from apartment refinance rates, and run a higher rate as well, because your takeout may be a year or more away. Agency small loans amortize over up to 30 years.
Min DSCR and max LTV
The permanent program's leverage limits. Freddie Mac's Conventional Small loan publishes a 1.25x minimum DCR, with maximum LTV of 75% on terms of five to under seven years and 80% on seven years and longer. Fannie Mae's Small Mortgage Loan program publishes 80% and 1.25x. Bank limits vary.
Cap rate for value
The cap rate an appraiser would apply to your stabilized NOI. Use recent sales of comparable renovated buildings in your submarket, not the cap rate you bought at. A small change in this number moves value a lot, so run a higher cap rate to see how much room you have.
Worked example
Say your bridge payoff, including the exit fee, will be $9,500,000. You expect the building to stabilize at $820,000 of NOI. The permanent loan is quoted at 6.0% on a 30-year amortization with a 1.25x minimum DSCR and 75% maximum LTV, and comparable buildings trade at a 6.0% cap rate.
| Takeout test | Result |
|---|---|
| Stabilized value at a 6.0% cap rate | $13,666,667 |
| Max loan by LTV | $10,250,000 |
| Max loan by DSCR | $9,117,942 |
| Takeout loan (DSCR binds) | $9,117,942 |
| Bridge payoff | $9,500,000 |
| Shortfall | $382,058 |
| NOI needed to cover the payoff | $854,359 |
| Highest rate at which the takeout covers the payoff | 5.62% |
Start with the shortfall or surplus line: it tells you whether you will need to bring cash to the takeout or walk away with some. Then look at which limit set the maximum takeout loan. If DSCR binds, the NOI needed figure and the break-even rate are your two levers, and the break-even rate shows how much the market can move against you before the takeout fails. If LTV binds, the cap rate is the variable that matters, and a lender's appraisal at a higher cap rate would cut the loan.
What this tool assumes
- Stabilization happens. The calculator takes your stabilized NOI as given. It does not test whether you reach it or how long it takes. The value-add loan calculator models the renovation period itself.
- Two sizing tests. It sizes on DSCR and LTV. Some lenders also apply a minimum debt yield, and some hold value-add takeouts below the program maximum. Check the debt yield on the result.
- No seasoning rules. Lenders may want a period of stabilized operations or a set number of months since the renovation before they lend. That can push your takeout date past the bridge maturity. Ask about it early.
- No closing costs. The takeout loan has its own closing costs and reserves, which reduce what is left to pay the bridge. Add them with the closing cost estimator.
- A fixed rate at takeout. The rate you enter is the rate the calculator uses. It does not forecast where rates will be when you refinance.
What to do with your result
Surplus. Check your bridge maturity and extension dates against the permanent lender's timeline in the maturity planner, then request quotes once you have the operating history the lender needs. Rerun the calculator at a higher rate and cap rate to confirm the surplus survives.
Small shortfall. Your options are more time for NOI to grow, a paydown from equity at closing, or a smaller senior loan combined with mezzanine debt or preferred equity where the senior program allows it. If your bridge has extension options, read their tests now.
Large shortfall. Talk to the bridge lender before maturity, not at it. Use the DSCR sensitivity calculator to see which combination of NOI and rate gets you there. The bridge refinance guide walks through each exit, including when a sale beats a refinance.
Frequently asked questions
How do I know if my bridge loan will refinance into an agency loan?
Compare your full bridge payoff, including the exit fee, with the largest permanent loan your stabilized building supports. That loan is the lower of the maximum LTV times value and the loan your NOI covers at the minimum DSCR. If the loan is larger than the payoff, the takeout works on paper. The calculator runs that comparison and shows the gap in dollars, NOI and interest rate.
What is the break-even rate?
It is the highest takeout interest rate at which the permanent loan still covers your bridge payoff, holding your NOI, amortization, DSCR and LTV inputs constant. Above that rate, the DSCR limit shrinks the loan below the payoff. It is the quickest way to see how much rate risk you carry between now and your refinance date.
Why does the exit fee matter so much?
Because it is part of what you have to pay to release the bridge lender's lien, and it is easy to forget when you compare the new loan with the outstanding balance. On a tight takeout, the exit fee alone can turn a surplus into a shortfall. Read the exit fee clause in your loan agreement and include it, plus any accrued interest and extension fees, in the payoff input.
What NOI will the permanent lender use?
Generally the income the building has actually produced, adjusted with the lender's own assumptions for vacancy, management fees and replacement reserves. Lenders differ in how they treat recent leases and concessions, and some want a period of stabilized operations first. Run your statement through the T-12 underwriting calculator to get closer to the lender's figure, and ask each lender how it will annualize recent income.
What if the takeout falls short?
The common options are waiting for NOI to grow if your bridge term allows it, paying down the difference from equity, adding subordinate financing where the permanent program permits it, extending the bridge, or selling. The right choice depends on the size of the gap and the time left on the bridge. Start those conversations well before the bridge maturity date.
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