How to Use Bridge Financing for Real Estate in Costa Rica

Bridge financing can help solve a short-term real estate timing problem when the property, title position, requested amount, and repayment plan all make sense. It is not a long-term mortgage, a guaranteed source of funds, or a substitute for a realistic plan to repay the loan.

GAP reviews qualified property-backed financing requests starting at US$50,000, including requests from borrowers of any nationality. GAP does not require or pull a credit score for a normal property-backed loan request and uses first-lien property security only.

• Requests starting at US$50,000
• Borrowers of any nationality may be reviewed
• GAP does not require or pull a credit score
• First-lien property security only
• Terms generally range from 6 months to 3 years
• For stronger completed properties, 30%–40% LTV can often be easier to structure
• Some stronger files may approach 50% LTV, depending on the complete file
• After a complete file and due diligence, qualified loans can often close in about 2 weeks

Every request is reviewed individually. Providing information does not create an approval, funding commitment, rate, loan amount, term, or closing date.

What Is Bridge Financing?

Bridge financing is short-term financing used to cover a defined period between one event and another. In a real estate setting, it may help a qualified owner or buyer address a timing gap while awaiting a documented source of repayment.

For example, a borrower may need capital to complete a purchase, pay out existing registered debt through the proper closing structure, finish a renovation, prepare a property for sale, or cover a business need while another asset sale or refinance is being completed.

The word “bridge” is important. There must be a real bridge from the loan closing to repayment of the principal balance. A future event can be part of that plan, but it needs to be realistic, documented where possible, and understood by the lender.

When Can Bridge Financing Make Sense?

Bridge financing may be considered when there is a clear short-term purpose and a realistic path to repay the principal balance at maturity.

Examples may include:

• Buying a property before proceeds from another property sale are available
• Paying out existing registered debt so a new first-lien loan can be properly structured
• Completing a renovation or construction stage that may improve the property’s marketability
• Covering a documented business need while waiting for expected liquidity from another source
• Refinancing a short-term obligation when the replacement structure is realistic and properly documented
• Giving an owner time to sell another asset without making a rushed sale of the property used as security

A bridge loan is not automatically appropriate simply because a borrower has equity. The lender still needs to understand the property, title, value, payment obligations, costs, and repayment plan.

The Property Is Security, Not the Repayment Plan

Property-backed financing involves two separate questions:

• How will agreed payments be made during the loan term?
• How will the principal balance be repaid at maturity?

A borrower may have a valuable property and still have a weak bridge-financing request if the repayment plan depends only on a hoped-for future event.

A future sale or refinance can be part of the plan. However, neither should be assumed. A loan renewal is not automatic, and another lender may not replace the loan at maturity.

A stronger repayment plan may involve established business income, documented rental income, a signed or well-supported property sale, expected investment liquidity, proceeds from another asset, or another identifiable source of funds.

Read why your repayment plan matters for a private loan.

How Much Can You Borrow?

Private lenders compare the requested amount with the property’s realistic current value. This is called loan-to-value, or LTV.

For example, a US$200,000 bridge-financing request against a property realistically valued at US$500,000 equals 40% LTV.

US$200,000 ÷ US$500,000 = 40% LTV

For stronger completed homes in marketable locations, requests around 30%–40% of realistic value can often be easier to structure. Some stronger files may sometimes support an amount approaching 50% LTV, depending on the complete property file, title position, repayment plan, lender requirements, and legal structure.

No LTV amount is guaranteed. A listing price, prior purchase price, construction cost, insured value, or hoped-for future sale price is not automatically the value a lender will use.

Completed, well-maintained homes in marketable locations can be easier to review. Raw land, unfinished construction, remote property, specialized buildings, or property with unanswered access, water, drainage, permit, or utility questions may require a lower amount or may not be workable.

Read what loan-to-value means in Costa Rica.

First-Lien Security Is Required

GAP uses first-lien property security only. Before a bridge-financing request can move toward closing, the ownership and legal position of the property need to be understood.

An existing mortgage, private loan, lien, annotation, unpaid tax balance, or another registered issue does not automatically rule out a request. However, the current balance, payoff requirements, and closing structure need to be clear early.

In some cases, existing registered debt must be paid through the proper closing process before a new lender can register in the required first position.

If a corporation owns the property, the lender and closing attorney or notary will need to review the relevant corporate records and signing authority.

What Does a Lender Review?

A lender reviews more than the fact that property is available as collateral. The real estate must have realistic value, practical marketability, workable access, and a title position that supports the required first-lien security.

The review may include:

• Property location, road access, driveway, condition, drainage, utilities, and marketability
• Title, ownership, corporate authority where relevant, and registered issues
• Existing mortgages, private loans, liens, annotations, unpaid taxes, or other legal concerns
• Recorded easements, rights of way, utility rights, and neighboring-use issues
• Realistic value support from comparable properties, purchase information, or an appraisal when needed
• The requested amount and exact use of funds
• How agreed payments will be made during the loan term
• How the principal balance will be repaid at maturity

GAP Does Not Require or Pull a Credit Score

GAP does not require or pull a credit score for a normal property-backed loan request. This can be relevant for foreign owners who do not have a Costa Rica credit history.

That does not make the review casual. The property, title position, realistic value, requested amount, payment plan, principal-repayment plan, legal work, and lender requirements still need to work together.

How Long Are Bridge-Financing Terms?

Terms generally range from 6 months to 3 years. The appropriate term depends on the purpose of the loan, the repayment plan, lender requirements, and the signed loan documents.

Payment structure, maturity, interest, legal fees, closing costs, and early-repayment provisions depend on the lender and signed documents. Any early repayment should be reviewed against the signed loan documents and applicable published interest-guarantee guidelines.

How Quickly Can a Qualified Loan Close?

After GAP has a complete file and due diligence is finished, qualified loans can often close in about 2 weeks.

Timing depends on title, lender review, legal work, banking, documents, existing debt, and closing requirements. No closing date is guaranteed.

What Helps Start the Review?

You do not need every document perfectly organized before the first conversation. Start with enough clear information for GAP to understand the property, the timing issue, and the proposed repayment plan.

• A Google Maps, Waze, or WhatsApp location pin
• Current photographs of the property, road access, driveway, buildings, and surrounding area
• A Folio Real and Plano Catastro, if available
• The requested loan amount and exact use of funds
• Realistic value support, appraisal information, purchase information, or comparable properties
• Details of any existing mortgage, lien, annotation, tax balance, or legal concern
• Corporate records and signing authority if a corporation owns the property
• A clear plan for agreed payments and repayment of the principal balance at maturity

Lawsen Tellier, Director of Operations, can help explain what is most important first and what can be gathered as the review develops.

Start your loan request here. You can also contact GAP through WhatsApp at +506 4001 6413.

Frequently Asked Questions

What is bridge financing in Costa Rica?

Bridge financing is short-term, property-backed financing used to cover a defined timing gap before a realistic source of repayment becomes available. The property, title position, requested amount, payment plan, and principal-repayment plan must all be reviewed.

Can I use bridge financing to buy a property?

Possibly. A lender will need to review the property, realistic value, title position, requested amount, use of funds, payment plan, and principal-repayment plan. No approval or closing date is guaranteed.

Can I use bridge financing while waiting for another property to sell?

Possibly. A future sale can be part of a repayment plan, but the lender will need to understand whether that sale is realistic, how long it may take, and whether the expected proceeds are sufficient to repay the loan and related obligations.

Does GAP require or pull a credit score?

No. GAP does not require or pull a credit score for a normal property-backed loan request. Each request is reviewed individually based on the property, title, requested amount, repayment plan, and complete file.

Can foreigners apply for bridge financing?

Yes. GAP reviews qualified property-backed financing requests from borrowers of any nationality. Costa Rican citizenship, permanent residency, and a local guarantor are not automatic requirements simply to have a request reviewed.

How long are bridge-financing terms?

Terms generally range from 6 months to 3 years. The final structure depends on the lender and signed loan documents.

How quickly can a qualified loan close?

After GAP has a complete file and due diligence is finished, qualified loans can often close in about 2 weeks. Timing depends on the full file and closing requirements. No closing date is guaranteed.

This article is for general information only. It is not a loan offer, legal advice, financial advice, tax advice, real estate advice, or a promise of financing. Loan availability, loan amounts, rates, terms, costs, and closing timing depend on the individual property, borrower file, lender requirements, due diligence, and signed documents.

Article by Glenn Tellier (Founder of CRIE and Grupo Gap)