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.
It feels like just yesterday I was recapping trends from 2024 and now here we are already halfway through 2025.
As I noted in our 2024 recap, bridge loan volume grew steadily throughout the year, while DSCR loan volume increased exponentially. That trend hasn’t slowed. In fact, this month DSCR volume was up 129% year-over-year, and as you’ll see in this report, it continues to set new records each month.
At the start of the year, I also flagged the potential for uncertainty under a new presidential administration and shifting economic policy. While we’ve kept a close eye on both, the reality is that the private lending market has remained remarkably stable so far in 2025.
We’re also watching broader housing trends. With inventory on the rise and demand softening in some regions, we may start to see pressure on home prices. And with the Big Beautiful Bill being passed, there’s still plenty to monitor in the months ahead.
But for now, let’s dive into what the data tells us about the first half of the year.
Bridge Loans Continue to Rise
If you’ve already looked at the chart below, you might be wondering, “What do you mean continue to rise?” On paper, monthly bridge loan volume has ticked down slightly—2,199 in April, 2,095 in May, and 1,967 in June. But consider this: April had 22 business days, May had 21, and June just 19. Adjusted for the amount of business days, the number of bridge loans closed per day has increased every month this year.
Zooming out, the trend becomes even more clear. With 6,340 bridge loans in Q2, this was the strongest quarter we’ve seen from Lightning Docs users active since January 2024. It also marks the largest quarter-over-quarter percentage increase—12.5%—since this same time last year.
Bridge Loan Interest Rates and Average Loan Amounts
In the intro, I noted the potential for downward pressure on housing prices in markets where supply is starting to outpace demand. In June however, this was not the case. The average bridge loan amount climbed to $732,766, the highest level in years and more than $175,000 above where it stood in June 2024.
Meanwhile, average bridge interest rates continued their slow descent, landing at 10.59% in June. This marks the sixth consecutive month of decline, and the 14th drop in the past 16 months. Median rates held steady at 10.50%, and rate distribution remained relatively unchanged, with modest shifts away from the 12.00–12.99% range into the sub-9% category.
Where Rates Are Highest
Among states with at least 20 bridge loans in Q2, 21 had average rates above the national figure of 10.59%. Southern and Midwestern states dominated this group, with Michigan leading high-volume states at an average rate of 12.04%.
Looking more granularly, 42 counties exceeded the national average rate with notable volume. California, Florida, and Massachusetts each had four counties on this list, while Michigan once again topped the chart—Wayne County posted an average rate of 12.24%.
Where Loan Sizes Are Largest
Twenty states had an average bridge loan amount above $500,000 in Q2 with at least 20 loans. As usual, coastal states made up most of the list. Six states—Arizona, California, Colorado, Massachusetts, New York, and Washington—averaged over $1 million, with Washington the highest at $1,364,133.
Top States by Loan Volume
Once again, there were no changes to the top bridge loan states for this year. North Carolina, New Jersey, and Pennsylvania continue to outperform compared to 2024.
A Tale of Two Cities
As I’ve mentioned in previous reports, Los Angeles and San Diego have consistently led the bridge loan market. What’s new in 2025 is how much San Diego has closed the gap. In 2024, Los Angeles produced 79% more loans than San Diego. So far this year, that margin has narrowed to just 18%. Also worth noting in June, Pinellas County, FL entered the top 10, giving California and Florida a combined seven of the ten top-performing bridge loan markets.
DSCR Loan Volumes in June
Looking at the 39 Lightning Docs DSCR users active since January 2024, there were 2,652 DSCR transactions in June alone. For context, that’s nearly equal to the total loan volume—across all types—on the platform in June 2024, which totaled 2,718.
DSCR Loan Volume: Q2 Review
Taking a step back, Q2 DSCR production from those same users reached 7,712 loans—a 19% increase from Q1 and a 115% increase year-over-year. The scale and consistency of DSCR growth remain unmatched across loan types.
Different Month, Same Rates
Last month, I touched on the stability of the overall macroeconomic environment. DSCR interest rates and average loan amounts in June are proof of that. With average rates holding steady at 7.61% and loan amounts increasing just over $400, June was pretty much on par with what we saw in May. Rate distribution matched this trend, with over two-thirds of loans falling between 7.00% and 7.99%.
Market-Wide Stability
Of the four rates we track—DSCR, bridge, consumer mortgage, and the 10-year treasury—two (DSCR and consumer mortgage) saw no change from the prior month. The other two (bridge and the 10-year treasury) dropped modestly by just four basis points. Through the first half of 2025, despite ongoing market noise, the lending environment itself has remained impressively steady.
Where DSCR Rates Are Highest
In Q2, 13 states recorded DSCR interest rates above the national average of 7.61% and had at least 20 loans. The group is dominated by the Midwest, with only California and Hawaii representing the Western U.S. Minnesota topped the list with an average rate of 7.84%.
Top DSCR Markets
At the county level, 38 markets exceeded the national average rate with 20+ loans. Pennsylvania is home to 6 of these markets. Three counties —Berks, PA; Taylor, TX; and Denton, TX—had an average rate above 8% with Taylor the highest in the country at 8.39%.
Where DSCR Loans Are Largest
Sixteen states averaged over $300,000 per DSCR loan in Q2 with more than 20 loans. As is typically the case, most of these states are located along the coasts. Hawaii stood out as a clear outlier with an average loan amount of $848,778. Among the remaining states, only California surpassed the $600,000 mark, averaging $614,952 per loan.
Texas on the Rise
The same states make up the top 10 for total DSCR loans so far through 2025. Within the year, Texas has been surging up the list, now at number 2 for all of 2025. Florida, Texas, Pennsylvania, Ohio, and New Jersey have all surpassed 1,000 DSCR loans for the year.
Top DSCR Counties
Cuyahoga County, OH and Philadelphia County, PA continue to lead all U.S. counties in DSCR volume, each surpassing 400 loans year to date. No other county has crossed the 300-loan mark. Relative to 2024, Los Angeles is the top performing DSCR market. At 234 loans halfway through the year, it has already surpassed last year’s 219.
At the halfway point of 2025, the trends we’ve been tracking all year continue to hold and, in many ways, that consistency is the story. Bridge lending remains strong, with Q2 setting a new high for volume among our long-term users. DSCR loans continue to scale rapidly, up 129% year-over-year and delivering some of the highest monthly volumes we’ve ever seen on the platform.
While there are new factors to watch such as rising housing supply in some markets and uncertainty around the Big Beautiful Bill, the market itself has remained remarkably stable. Interest rates across DSCR, bridge, consumer mortgage, and the 10-Year Treasury continue to move within a tight band, and average bridge loan amounts reached a multi-year high in June. Even with shifting headlines, the private lending environment has stayed active, resilient, and well-positioned as we head into the second half of the year.