RTL Loans: Residential Transition Loan Program

What Are Residential Transition Loans?

A residential transition loan (RTL) is an umbrella term for short-term investment property loans that require quick, flexible financing for projects, such as bridge loans, flipping a house, or building from the ground up.

A transitional loan works differently for investors than traditional mortgages. Instead of focusing on your personal income and credit score, lenders care primarily about the property’s potential value and your investment strategy. As such, RTL mortgage options are especially attractive for investors who might not qualify for conventional financing or need faster funding than traditional lenders can provide.

Many investors use residential transition loans to quickly secure properties or complete renovations before refinancing into a conventional mortgage.

Types of RTL Mortgages

You have several residential transition loan options to choose from if you’re an investor, each serving specific needs:

Bridge Loans

Bridge loans are a versatile financing option designed to provide short-term capital for real estate investors who need immediate funding before securing long-term financing or selling a property. These loans are particularly useful for fix and flip investors, landlords, and developers who need to act quickly in competitive markets or require temporary financing while transitioning between projects.

Bridge loans typically have loan terms of 12 to 24 months and are structured as interest-only payments, allowing investors to preserve cash flow while completing their projects​. They are secured by the property being financed and often require a business entity, such as an LLC, as the borrower.

Unlike fix and flip loans, which are designed for properties needing significant renovation, bridge loans can be used for a wider range of investment strategies, including:

• Acquiring properties quickly before permanent financing is secured
• Buying time to improve property value before selling
• Facilitating 1031 exchanges
• Transitioning from one investment to another without liquidating assets

Consider using a bridge loan if:

• You need to move quickly on a property purchase but don’t have long-term financing secured yet.
• You plan to refinance into a traditional mortgage or rental loan once stabilization is achieved.
• You are waiting to sell another property to free up capital for a new investment.
• You need temporary funding to reposition a property (e.g., lease-up, minor improvements) before securing a long-term loan.

Fix and Flip Loans

Fix and flip loans specifically target investors looking to purchase, renovate, and sell residential properties for profit. Unlike traditional mortgages, these loans are structured with shorter terms, usually 6-12 months, to match typical renovation timelines. These loans typically cover both the purchase price and renovation costs, making them ideal for:

• Property rehabilitation projects
• Quick turnaround investments
• Major renovation undertakings
• Investors using the BRRRR method to build their rental portfolios

Construction Loans

Construction loans help fund ground-up building projects or major renovations. These short-term loans, ranging from 6 to 12 months, provide funding for each phase of construction as project milestones are met.

During the construction period, you’ll typically only need to make interest payments, which helps manage costs while building. The loan can cover land acquisition and building costs, and you may be able to convert your construction loan to permanent financing once the project is complete.

Benefits of RTL Loans

RTL mortgages offer numerous advantages for real estate investors. Here’s what makes them stand out:

• Fast approval and funding process: While traditional mortgages can take 30-45 days to close, RTL loans often close in as little as 7-10 days. This speed gives you an edge in markets where the best deals move quickly. You can make confident offers knowing your funding will be ready when you need it.
• Less emphasis on personal credit history: Lenders evaluate the property’s potential and investment strategy instead of focusing primarily on your credit score. This makes residential transition loans accessible even if you’ve had past credit challenges or are self-employed with complex income documentation.
• No set income requirements: Instead of requiring W-2s or tax returns like traditional mortgages, RTL loans focus on the property’s potential and your experience as an investor. This makes them ideal for self-employed investors or those with non-traditional income sources who might struggle to qualify for conventional loans.
• Flexible terms tailored to investment strategies: Every real estate deal is unique, and RTL loans reflect this reality. Your loan terms can be structured around your specific exit strategy, whether that’s a quick flip or a longer-term hold and rent scenario.
• Ability to finance properties that need work: Unlike traditional lenders who shy away from properties in poor condition, RTL loans are designed specifically for properties that need rehabilitation. You can finance both the purchase price and renovation costs in a single loan.
• Can be used in conjunction with other financing tools like a home equity loan (HELOAN) or home equity line of credit (HELOC): This versatility lets you leverage multiple funding sources to optimize your investment strategy. You might use an RTL loan for the purchase and renovation while keeping a HELOC as a backup funding source for unexpected expenses.

Who Qualifies for a Transition Loan?

Transitional loans are designed for investors only; they are not for primary residence buyers. While exact requirements vary by lender and loan type, here’s typically what matters:

• Your experience: Previous real estate investment experience is helpful but not always required. Instead, having a strong business plan and exit strategy is ideal.
• Financial requirements: Down payments for RTL loans vary. However, you should aim for a down payment of around 10-30% of the purchase price while maintaining reserves. Many lenders like to see a good credit score, though this requirement is less important than with traditional loans. Lenders will also look at proof of income or assets.
• Property criteria: The property must be for investment purposes only, and the after-repair value must support the loan amount.

Ready to apply? You can apply online or review your options via the Griffin Gold app. Once you’re ready to get started, you can contact us for an initial consultation, where our experienced loan officers will learn about your goals and help you identify the best financing solution.

After you apply, we’ll coordinate a property evaluation and appraisal to determine the property’s current and potential value. At the same time, you’ll submit documentation, and our team will guide you along the way.

Our streamlined underwriting process moves quickly, and once approved, we’ll coordinate with our closing team to get your funding in place.

Work With a Trusted RTL Lender

Residential transition loans give investors fast funding without the restrictions of traditional mortgages. They work best for fix and flip projects, new construction, or any investment property that needs quick financing.

Griffin Funding helps investors get RTL loans quickly and easily. We offer competitive rates and can typically close within just 7-10 days. Get started today or contact us to discuss your investment goals.