Definitions and Methodology
A bridge loan is any loan with a duration of 36 months or less utilizing interest-only payments for the duration of the term and containing a balloon payment at the end of the loan. Bridge loans are commonly referred to as residential transition loans, fix-and-flip, non-owner occupied, hard money, or in other terms that describe a short-term loan generally secured by a residential property for investment purposes.
DSCR loans are 30-year term loans secured by rental properties. DSCR stands for Debt Service Coverage Ratio, which identifies that the primary underwriting for these loans is done by dividing the monthly net operating income of the property by the monthly debt service.
If you’re getting tired of hearing me talk about DSCR loans, I’ve got some bad news. This month’s data makes it impossible to ignore what’s happening in the market.
In May, Lightning Docs users generated 2,757 DSCR loan documents. That’s nearly 200 more than the number of bridge loan documents in the same period. To put that in context, this isn’t just a strong DSCR month, it outperformed every bridge loan month on record.
Because of that, I’m changing up the usual format and leading with DSCR data this time. The demand is real, and if you’re not offering DSCR loans yet, now is the time to take a serious look.
DSCR Loan Volume
Among the 38 DSCR lenders who have been using Lightning Docs since January 2024, there were 2,637 DSCR loans in May. That’s an average of nearly 70 loans per user. By comparison, bridge loan volume was nearly the same, but came from 166 users—averaging just under 13 loans each.
The year-over-year growth tells the same story. In May 2024, those same 38 DSCR users closed 1,196 loans. That’s a 121% increase in just one year.
I’ll keep emphasizing the importance of staying ahead of the curve. These 38 users are proof of what that looks like, and many of them are behind the strongest growth stories of Lightning Docs clients.
Bridge Loan Volume
Among the 166 users who have been with Lightning Docs since January 2024, there were 2,095 bridge loans completed in May. While this total came in just below April’s 2,199 loans, it’s worth noting that May had one fewer business day. When adjusted for that, bridge volume was effectively on pace with the previous month’s all-time high.
This also represents a 31 percent increase compared to May of last year, reinforcing that even with growing interest in DSCR, bridge lending continues to be a strong and reliable segment of the private lending market.
DSCR Interest Rates and Average Loan Amounts
DSCR interest rates increased for the first time since January, rising 9 basis points. Average loan amounts also rose, up nearly $2,000, making May 2025 the highest average DSCR loan amount since May 2022.
We also saw a shift in interest rate distribution. Loans priced between 7.00%–8.99% dominated, accounting for over 80% of DSCR transactions. Predictably, the share of loans priced below 7% shrunk as the average rate increased.
Bridge Loan Interest Rates and Average Loan Amounts
Bridge loans saw a $7,000 increase in average loan amount in May. Like DSCR loans, this marks a multi-year high, reaching their highest level since March 2022.
Interest rates for bridge loans held steady, dipping just 2 basis points from April, while the median rates remained unchanged at 10.50%. Rate distribution showed little movement, highlighting the continued stability of the market.
Rates Remain in a Tight Band
Speaking of stability, the broader rate environment has been surprisingly consistent. Since November 2024, all four of the rates we typically track—DSCR, Bridge, Consumer Mortgage, and the 10-Year Treasury—have each remained within a 30-basis-point range.
Despite all the recent market noise, the reality is that we’ve been operating in a remarkably steady environment. Lenders who’ve stayed focused and avoided being distracted by headlines are now seeing the payoff.
Top DSCR States
There were no changes in the top 10 DSCR states in May. Florida retained its top spot, with Pennsylvania and Ohio close behind. These three states have been neck-and-neck all year, each taking the top slot at least once in 2025. That said, Florida stood out in May with 346 DSCR loans, well ahead of Pennsylvania (234) and Ohio (226).
Top Bridge States
May also saw no changes to the top 10 states for bridge lending, with California, Florida, and Texas continuing to lead the way. As we near the halfway point of 2025, we’re seeing greater consistency across key trends, including state-level rankings, which have begun to stabilize month over month.
Top DSCR Counties
Until now, Cuyahoga and Philadelphia have been pretty interchangeable as the top DSCR market. But with nearly 100 loans in May, Cuyahoga is starting to emerge as the clear front-runner.
Wayne, Los Angeles, Miami-Dade, Harris, and Allegheny counties all recorded their strongest months of the year, highlighting broader DSCR momentum across major metros. In contrast, Essex, NJ posted its lowest volume of 2025 so far, nearly dropping out of the top 10.
Top Bridge Counties
Los Angeles and San Diego remain the powerhouses for bridge lending in 2025, with 788 and 610 loans, respectively. Only one other market—Cook, IL—has surpassed 500 loans across both bridge and DSCR combined this year.
Final Takeaways
This month’s data highlights two clear themes.
First, DSCR is no longer an emerging trend. It has become a central part of private lending. With 2,757 DSCR transactions on Lightning Docs in May, it not only outpaced bridge loans by nearly 200 but also surpassed any historical monthly bridge volume.
Second, market stability is more real than the headlines suggest. While uncertainty continues to dominate the broader narrative, the past seven months have shown a remarkably steady environment for private lending. Lenders who recognize this and continue to operate with discipline and focus are well positioned to grow.
There is no guarantee that this stability will last, but those who tune out the noise and stay the course are already seeing the payoff.