B3-4.3-14, Bridge/Swing Loans (04/01/2009)

A bridge (or swing) loan is an acceptable source of funds provided the following requirements are met:

• The bridge loan cannot be cross-collateralized against the new property.

• The lender must document the borrower’s ability to successfully carry the payments for the new home, the current home, the bridge loan, and other obligations.

Fannie Mae does not have a specified limitation on the term of bridge loans. See B3-6-05, Monthly Debt ObligationsB3-6-05, Monthly Debt Obligations, for more information about how to treat the resulting contingent liability.