Paul Brighton was pleasantly surprised when a lender threw an ultra-low interest rate at him for a $15 million bridge loan.

Brighton and the team from Bloomington, Minn.-based NorthMarq Capital, hadn’t heard of a bridge loan rate of under 5 percent since before the Great Recession. The low quote is a drastic change from the double-digit rates reluctantly doled out in 2009 for acquisition-rehabilitation deals.

“We’ve seen interest rates gradually decrease as more of that money is available and as lenders are more comfortable with the market,” he said.

Brighton, senior director of the company’s Dallas office, said lenders are competitive in the bridge loan space for both pricing and leverage--an indication the market has reached the highly anticipated light at the end of the tunnel.

“They don’t want to provide a bridge loan for another bridge loan,” he says. “They want to provide a bridge loan where there’s some increase of value at the end of the day.”

Developers are convinced it is time to start revving the engines behind acq-rehab and lenders are eager to back deals with developers who have a proven track record of bringing rents up on rehabbed assets.

Many financiers are now expanding and developing bridge financing programs.

Uniondale, N.Y.–based Arbor Commercial Mortgage has been pushing clients toward the company’s Arbor Realty Trust private bridge loan program to help “seamlessly transition” from a bridge into permanent financing with an agency, Matt Norman says.

Norman, vice president of Arbor’s Dallas office, said rehab projects have picked up since the downturn with the resurgence of liquidity into the multifamily space. However, today’s market isn’t so saturated that lenders are eager for any type of deal.

“Underwriting parameters haven’t loosened to the point where we’re going to look to do deals with an inexperienced rehabber,” Norman says. “We’re not going to lend bridge money for an acquisition-rehab to a first time repositioner, with little experience or financial backing.”

Prior to the downturn, it was more acceptable to take a risk on an up-and-coming rehabber, he said. That isn’t an option today, as lenders aren’t willing to take the risk in a recovering economy.

Many lenders are taking a more critical look into the past, says R. Lee Harris. It isn’t tough for those who were strong prior to the downturn and came out strong, says

Harris, president and CEO of Overland Park, Kan.–based Cohen-Esrey Real Estate Services.

“If you were weak then and you’re weak now, it’s going to be a bit harder,” he says.

Those facing the hardest battle are rehabbers who were weakened by the downturn and emerged less vibrant than they were before. But the market is poised to continue growing. 

“If you’re missing out today because the numbers won’t work, you’ll find another [opportunity] later in the year,” Harris says.